Tariff toll: Whisky giant behind The Glenlivet blames ‘market dynamics’ for softer sales

Chivas Brothers, the Scotch whisky giant that owns The Glenlivet and Ballantine’s, has blamed “complex market dynamics” and “global economic headwinds” for a dip in sales.

The firm, which forms part of French spirits empire Pernod Ricard, said organic net sales in the first half of its financial year were down 2 per cent, due to a slow first quarter with a “gradual recovery” in the second.

Chivas’ strategic brand performance varied market to market during the period, with any softening partially mitigated by the firm’s “broad and balanced global footprint”. Bosses noted that the company remains in growth on a five year comparison basis, with sales up 5 per cent.

Ballantine’s is one of the key Scotch whisky brands at Chivas Brothers, which is part of Pernod Ricard.

Emerging markets such as Turkey (up 56 per cent), Brazil (8 per cent) and India (1 per cent) generated positivity for key strategic brands Chivas Regal and Ballantine’s as consumers continued to seek out and trade up to premium Scotch. This was contrasted by ongoing challenging conditions in other markets, with dynamics in the US (down 10 per cent) and China (-19 per cent) particularly impacting strategic brands across the breadth of the company’s portfolio.

Chivas Brothers’ chairman and chief executive, Jean-Etienne Gourgues, said: “Our H1 [first-half] performance reflects the complexity of the global Scotch market, along with the agility and resilience of our organisation. While we remain realistic about short-term challenges, we’re taking a dynamic approach to investments in our brands and in our business to help navigate through these headwinds while preserving our long-term ambition.”

Ballantine’s global sales saw strong growth of 8 per cent, driven by the iconic Ballantine’s Finest which increased sales in most of its strategic markets. Chivas Regal grew by 3 per cent but The Glenlivet’s global sales fell 9 per cent as a result of “challenging US and Asian market dynamics”. Royal Salute experienced a 20 per cent slide as a result of tightened consumer spending across key Asian markets.

The figures come just days after Johnnie Walker and Talisker owner Diageo said it was talking with the US government over upcoming tariff policies which could “impact” its performance as it warned of a potential major blow to profits.

Chief executive Debra Crew said confirmation over the weekend that tariffs would be imposed, although delayed for at least a month in Mexico and Canada, “adds further complexity” to the group’s ability to predict future trading. Diageo said its tequila and Canadian whisky brands were expected to be particularly affected.

The warning came as the world’s largest spirits maker, which has almost 30 malt distilleries in Scotland and owns global brands such as Johnnie Walker whisky, Guinness stout, Smirnoff vodka and Captain Morgan rum, revealed that reported net sales dipped 0.6 per cent to $10.9 billion (£8.8bn) for the six months to December 31, as an increase in organic sales was dragged back by “unfavourable” currency exchange rates. Reported operating profit declined 4.9 per cent for the group’s first-half period.

The Trump-imposed tariffs could hit Diageo profits to the tune of $200 million.

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