US lifts Pernod Ricard; China still ‘difficult’

By Reuters – Global Times Source:Global Times-Agencies Published: 2015-10-22 23:48:01

French spirits group Pernod Ricard expects sales to improve gradually this financial year in its main market of the US and in Europe, but said China, where sales fell 9 percent in the past three months, remained difficult.

The world's second-biggest spirits group behind Britain's Diageo Plc said a resilient Europe and robust sales in the US where Jameson whiskey did well helped it achieve a 3 percent rise in underlying sales for the first quarter to the end of September, beating market expectations.

The owner of Mumm champagne, Absolut vodka and Ballantine's whisky said sales in China, which makes up 9 percent of group sales, were hit by wholesaler de-stocking and a slowdown in the less expensive Noblige cognac.

Like its global rivals, Pernod has also been hit by a Chinese government crackdown on luxury gift-giving and personal spending by civil servants, as well as by slowing economic growth in its second-biggest market.

Pernod's comments on China contrasted with those of Remy Cointreau and LVMH's Moet Hennessy spirits division last week, who had said cognac demand in China was improving slightly.

Pernod forecast growth in underlying profit from recurring operations of between 1 percent and 3 percent for the year ending June 30, 2016.

That would compare with profit growth of 2 percent achieved in its 2014 to 2015 fiscal year.

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