Chivas whisky owner Pernod Ricard toasts buoyant sales as Covid measures ease

Chivas Brothers owner Pernod Ricard, the global drinks major that ranks as Scotland’s second largest whisky producer, has seen buoyant demand in Europe, China and the United States help it beat first-half forecasts.

The firm is also forecasting strong sales growth in the full year despite continued fallout from the pandemic. Resilient consumption by people staying at home, the reopening of bars, pubs and restaurants, the lifting of coronavirus restrictions and a gradual recovery in the travel retail sector will help underpin sales growth in key regions.

The French group, whose brands include Mumm champagne, Absolut vodka and Martell cognac, said profit from current operations in the six months to the end of December topped just under €2 billion (£1.7bn), an organic rise of 22 per cent, ahead of analysts’ expectations.

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Sales totalled some €5.96bn in the first half of the group’s financial year, representing an organic rise of 17 per cent, which was also better than the market had been expecting.

French spirits giant Pernod Ricard has brands including Chivas Regal, The Glenlivet, Mumm champagne, Absolut vodka and Martell cognac. Picture: John Devlin

Sales growth cooled to 14 per cent in the second quarter from 20 per cent in the first quarter, as expected, due to comparisons with the year before.

The group said its strategic international brands and specialty portfolio were driving a strong price/mix.

Sales from the strategic international brands business rose by 19 per cent, with the firm pointing to a “broad-based rebound” with all brands growing, notably Jameson, Martell, Ballantine’s, Absolut and Chivas Regal.

Chairman and chief executive Alexandre Ricard said: “The execution of our ‘Transform & Accelerate’ strategy is delivering an excellent and broad-based performance in the first half, with brand share gains in most countries and with all our must-win markets showing very strong growth.

“I take the opportunity to praise the engagement and performance of our teams throughout the world, who have relentlessly accomplished outstanding work, in an environment still largely disrupted on many fronts by the Covid crisis.

“Despite the ongoing volatile environment, we expect for [full-year 2022] strong sales growth across regions, with continued on-trade rebound, off-trade resilience and a gradual travel retail recovery. We will increase investments to fuel growth momentum.”

Pernod Ricard is the world’s second-biggest spirits group after Johnnie Walker-owner Diageo, which last month cheered a sales recovery as pubs and bars started reopening with the easing of Covid restrictions.

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Trade was particularly strong in Britain, with overall sales up 19 per cent, including a 13 per cent rise in spirits and a more than 30 per cent jump in Guinness sales in the six months to the end of the year, compared with the same period in 2020.

Within spirits, vodka was particularly impressive, with sales up 21 per cent driven by Smirnoff. Baileys and rum also grew but sales of gin declined.

Despite the solid growth, Diageo, which is Scotland’s biggest whisky producer by volume and also owns Bell’s, revealed that it was feeling the pinch from growing inflationary pressures, with costs rising and supply chains remaining strained.

Tequila was the fastest-growing drink for the business during the first half.

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