Chivas whisky owner Pernod Ricard toasts 'very strong' sales after hiking prices: reaction

Pernod Ricard, the global spirits giant that owns Scotch whisky producer Chivas Brothers, has cheered forecast-beating first-half sales, helped by price hikes in key markets.

The French group, whose brands include Mumm champagne, Absolut vodka and Martell cognac, forecast strong annual revenue growth as it pushes through further price increases in the second half and drinkers trade up. Pernod, which ranks as the world’s second-biggest spirits group behind Johnnie Walker-owner Diageo, reported profit from current operations of just over €2.42 billion (£2.15bn) for its first half to the end of December, an organic rise of 12 per cent compared with the year before and ahead of analysts’ expectations for an 8.2 per cent increase. Sales totalled slightly above €7.11bn in the first half, also marking an organic rise of 12 per cent, and ahead of analysts’ predictions.

The strong first-half showing reflected a 5 per cent increase in sales in the US, the group’s top market, with growth driven by strong hikes across its portfolio and new prices planned for the second half of its financial year. Europe notched up sales growth of 6 per cent. Within its spirits segments, the firm’s “strategic international brands” recorded growth of 13 per cent thanks to “strong momentum” from its Scotch portfolio, Jameson and Absolut.

Chairman and chief executive Alexandre Ricard said: “Our first-half performance was very strong, marked by broad-based and diversified growth across all regions and categories. In addition, a particularly strong pricing dynamic illustrates the attractiveness of our portfolio of premium brands and enabled us to sustain margins in an inflationary context. We will continue to invest behind our brands, our group-wide transformation, and deliver operational efficiencies and prepare for exciting future growth opportunities. I expect this dynamic growth to continue through [the full year] albeit in a normalising environment, demonstrating the strength of our strategy and the agility, dedication and exceptional engagement of our teams around the world.”

Chivas Brothers’ chairman and chief executive Jean-Etienne Gourgues said: “These positive results reflect the impact of our long-term portfolio elevation and premiumisation strategy. It’s a testament to the resilience of Scotch, its bright future and our continued drive to open up the category to new audiences.”

Chris Beckett, head of equity research at Quilter Cheviot, noted: “Pernod delivered strong H1 results, with organic sales and profits both up 12 per cent, beating expectations. Unlike most consumer categories, spirits are still achieving volume growth. Pernod’s pricing is currently up 10 per cent and volume up 2 per cent. Scotch and Indian whiskies have been selling particularly well, but there appears to be a slight slowdown in premiumisation as speciality brands outperformed mainstream brands by less than in previous quarters - though this is to be expected given the rising cost of living.”

Last month, Diageo toasted strong sales and earnings after “savvy” drinkers splashed out on higher-priced and premium tipples. The world’s largest spirits maker has almost 30 malt distilleries in Scotland and owns global brands such as Guinness stout, Smirnoff vodka and Captain Morgan rum.