FRANCE: Pernod to seek compensation for Seagram overstocking
Pernod Ricard, the French drinks group which bought Seagram wines and spirits with Diageo last year, is seeking compensation for the overstocking of two of the premium Seagram brands it acquired in the sale.
Chairman Patrick Ricard said Pernod Ricard had found an inventory surplus of 750,000 litres of Chivas Regal and 450,000 litres of Martell when it took control of the two brands last December.
"It wasn't good practice to run up these stocks," said Ricard. He said it could take at least a year for the market to absorb these volumes.
Announcing Pernod's full year results yesterday, chairman Patrick Ricard reported that the group had suffered an 18% fall in volumes of Martell Cognac and 15% in Chivas Regal Scotch.
The fall prompted fear in the investment community that Pernod was struggling to integrate the Seagram portfolio into the company and the company's stock fell by as much as 6.12% yesterday.
"There has been overstocking - we took into account about 10% (overall)," Ricard said. "We are going to claim for compensation," he added.
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