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Analysis - Pernod Ricard's China dip confirms slowdown

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The economic slowdown in China could last for another nine months, an analyst has warned in the wake of Pernod Ricard's latest results.

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Deutsche Bank analyst Jamie Isenwater noted today (25 April) that Pernod's organic growth rates in the country dropped from 18% in H1 to -2% in Q3. “The question now is how long and how deep the slowdown will be,” Isenwater said.

An anti-corruption campaign, launched shortly after new China president Xi Jinping entered office last year, has had a “major effect” on Pernod's volumes in the country, Isenwater said. “Volume growth is slowing, mix is turning negative and pricing is more difficult to come by,” he added.

Last month, Pernod warned its performance in China would be hit by a clampdown on inter-governmental gift-giving and banquets.

In a trading update released this morning, Pernod posted a 5% net sales increase in the nine months to the end of March, and said it remains on track for 6% organic sales growth for the full year.


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