just On Call - Pernod Ricard upbeat on Martell, cool on Whyte & Mackay
Pernod Ricard has seen the performance of its Martell Cognac brand driven by China
Pernod Ricard maintains that the reliance of its Martell Cognac brand on the Chinese market is not a concern, despite a marked fall in the brand's performance there in the company's fiscal first half.
Late last week, Pernod posted falling sales and profits in the six months to the end of December, with sales in China plunging by 18%. According to The IWSR, in 2012, the country accounted for around 60% of Martell's global volumes.
Speaking at a results briefing in London today (18 February), CEO Pierre Pringuet said: “Martell overall is doing pretty well globally. Excluding China, the brand's sales rose by 9% in the half-year. We have plenty of initiatives for the brand.
“In China," he continued, "we have launched Distinction, a VS Cognac designed to pair with Chinese cuisine. The extension is also cheaper, in the range of EUR30 (US$41), so it's more affordable and more casual.”
Pringuet noted, however, that 75% of Martell's total sales in value terms still hail from China.
Pringuet also highlighted the brand's efforts elsewhere. “In the US,” he said, “we launched Caractere (late last year), targeting the Hispanic community. It's too early to say what the results are, but we're looking to capitalise on the strength of Martell in Mexico, where the brand is the leading Cognac. We definitely want to extend that into the US.”
Later in the briefing, Pringuet was asked about the high price that Suntory Holdings will pay to buy Beam Inc. “For reasons that I cannot explain,” Pringuet said, “we are not surprised at all.”
Finally, when asked about the likelihood of a move by Pernod for Scotch whisky producer Whyte & Mackay, Pringuet said: “In French, I use the saying 'it doesn't prevent me from sleeping well'.”
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