UK: Pernod hints at spirits brands sale

Pernod Ricard has hinted it may sell off more spirits brands following its successful takeover of Absolut vodka owner Vin & Sprit.

Pernod chief executive Pierre Pringuet indicated today (24 July) that the group might be willing to listen to offers for some peripheral brands, but refused to elaborate on which ones. Speaking at the French firm's full-year results conference in London, Pringuet added there were "several companies which were possibly interested".

EU competition authorities, which last week cleared Pernod's EUR6.59bn (US$8.78bn) takeover of V&S, have already said that Pernod must sell certain brands owned by the Swedish group, including Star Gin, Lubuski Gin and Gronstedts Cognac. A further sell-off, which analysts speculate could include Plymouth Gin, would allow Pernod to concentrate resources on V&S' core brands.

Pringuet said the group also planned to have terminated its distribution deal for Stolichnaya vodka within a "maximum of six months", and possibly closer to two.

He refuted suggestions that a slowdown in western economies, and notably the US, was a threat to growth in premium spirits like Absolut vodka. Pernod's sales slipped 3% in its fourth quarter due to the weak dollar, although big spirits brands such as Martell, Jameson and Havana Club recorded double-digit growth for the full-year.

"We are not facing a collapsing market in the US," Pringuet said. "When I read the newspapers with their gloomy predictions about the economy, I wonder if I am living in this world." Emerging markets in Asia have yet to suffer from a similar slowdown and this may help to insulate Pernod as "a global company exposed to a global market", he added.

Pernod saw sales rise by 2.3% for the year to the end of June and predicted operating profit would rise by 13% in the coming 12 months.