Pernod Ricard upbeat ahead of minimum pricing ruling

Pernod Ricard UK boss Denis O'Flynn 'doesn't believe minimum alcohol unit pricing is the correct way of addressing the issues'. Picture: John Devlin

Pernod Ricard UK boss Denis O'Flynn 'doesn't believe minimum alcohol unit pricing is the correct way of addressing the issues'. Picture: John Devlin

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SPIRITS major Pernod Ricard has played down the potential damage if a key European legal ruling today on the minimum pricing of alcohol in Scotland sides with the Scottish Government.

The imposition of a 50p per alcohol unit minimum price has been fought tooth-and-nail by the Scotch Whisky Association since being introduced by Holyrood in 2012, and the Advocate General at the European Court of Justice delivers his initial opinion this morning.

However, Pernod Ricard, which owns the Chivas Brothers whisky business in Scotland, said yesterday that while it strongly opposed minimum pricing it would be insulated if the judge ruled against the industry because the company’s products were premium-priced anyway.

Denis O’Flynn, managing director of Pernod Ricard UK, said consequently the business had made no contingency plans for any adverse ruling by the Luxembourg court.

“As we are in the premium end of the market, from a strategic point of view it’s unlikely to affect our brands particularly at this stage. It certainly won’t affect us immediately,” O’Flynn said.

“At the [mooted] minimum price, that does not affect any of our product range at all. In that sense, we don’t need to have any plan.”

Among Pernod’s top whisky brands are The Glenlivet malt whisky, Chivas Regal and Ballantine’s, as well as Martell cognac and Mumm and Perrier-Jouet champagnes.

O’Flynn said that even if any Europe-ratified minimum alcohol price “drifted upwards”, it was still likely to hit consumers more than deluxe spirits’ producers.

However, he added that even though Pernod Ricard UK would be largely protected from minimum pricing, the company still opposed it as a “quasi health tax that is a very risky strategy”.

The Scottish Government has said minimum pricing is necessary to address Scotland’s “unhealthy relationship with alcohol”.

But O’Flynn said: “We don’t believe minimum alcohol unit pricing is the correct way of addressing the issues it sets out to address.”

He said Pernod Ricard believed education on the dangers of alcohol misuse and personal responsibility were better ways to address the problems.

The European Court of Justice is due to give its final opinion on minimum pricing in late 2015/early 2016.

Pernod Ricard UK also said yesterday at a London presentation that it expected a mini-boom in consumers buying spirits online over the coming two or three years.

O’Flynn said this was likely due to the UK being more “digitally-savvy” than many countries, citing factors such as the number of card payments made for products.

“We [the UK] have tended to adopt technology quicker than anybody. E-commerce is a key strategy for us in the UK, we see an increasing shift from bricks and mortar to online purchasing,” he said.

“We don’t think anyone [in the drinks industry] has taken a lead here and see it as an opportunity to get in that area.” Pernod Ricard UK said it was now “talking to potential partners” with a view to advancing that e-commerce strategy. Last week the French parent company posted a 2 per cent rise in underlying profits to €2.23 billion (£1.6bn) in the 12 months to end-June.

Whiskies were the star category, with The Glenlivet’s sales up 11 per cent, Irish whiskey Jameson up 10 per cent, and Ballantine’s ahead 3 per cent.

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