Absolut Lime rolled out to the US last month

Absolut Lime rolled out to the US last month

The CEO of Pernod Ricard has said the company must stand its ground on Absolut's pricing in the US, in the wake of increasing pressure from the other players within the vodka category.

Yesterday, Pernod Ricard posted a 4% lift in half-year sales, as the group continues to see growth driven by the US market. However, success in the country was driven by the Jameson Irish whiskey brand, while Absolut continued to struggle.

In a conference call following the results announcement, group CEO Alex Ricard said the key to tackling price pressure from the vodka segment is to maintain the brand's position.

"Absolut's Nielsen's [value depletions] are down 5%, NABCA [National Alcohol Beverage Control Association] down 1%, so the underlying performance is anywhere between these two numbers, basically a little bit more difficult than anticipated," he said.  "We have seen over the last 12 months a lot of pricing activity within that segment, which is affecting the performance of Absolut as a brand, and I would say our challenge from a pricing point of view is not to lower our price but to be more efficient from a promotional strategy point of view."

Ricard said the company aims to stabilise the brand in the US in the "medium term", noting the recent launch of a new advertising campaign, the launch of Absolut Lime and success for super premium expression Absolut Elyx in the market. 

"Absolut Elyx is posting some strong numbers... albeit from a low base," he said. "Absolut Elyx, I think, is now the most expensive super premium vodka brand of size in the US."

The CEO said the country is the "most important margin" for Pernod, both in the Americas and globally.

Elsewhere, the Absolut brand appears to have stabilised. Half year sales for the vodka were up 1% with a 2% rise in volumes.

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