Tariff turmoil deals a blow to owner of Scotland’s number two whisky producer

The owner of Scotland’s second-largest whisky producer has reported a 3 per cent fall in sales as tariff uncertainty rocks the spirits sector.

French drinks empire Pernod Ricard, whose Chivas Brothers business includes brands such as The Glenlivet and Ballantine’s, had been expected to post just a 2 per cent decline in organic net sales for the three months to the end of March.

Bosses described the latest quarterly performance as “resilient” amid a global macroeconomic and geopolitical environment which remained “challenging and very fluid” in relation to tariffs.

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

The group’s sales were given a lift by US wholesalers ordering ahead of expected tariffs, although this was offset by other issues including a production interruption in India, the impact of tariffs on cognac sales in China, and a 31 per cent downturn in its travel retail division due to the suspension of duty-free sales of cognac in China.

Analysts said the firm now needed solid sales growth in its final financial quarter to meet expectations for annual sales.

US President Donald Trump’s changing policy on trade tariffs has plunged the global spirits industry into turmoil. Scotch Malt Whisky Society owner Artisanal Spirits Company recently cheered record annual earnings but warned of “uncertain economic conditions in some markets”. Chief executive Andrew Dane said the Edinburgh-based group, which listed on the London Stock Exchange in 2021, was able to “flex as required” amid the tariff fallout.

In its latest sales update, Pernod Ricard noted: “Our balanced and broad-based geographic breadth and our diversified portfolio remain key in mitigating some of the impacts caused by the challenging environment.

“As previously indicated, we are continuously adapting our resources with agility, deploying our operational efficiencies and steering the organisation to fuel our future growth and optimising our cash generation.”

The group said its “strategic international brands” unit had seen a 4 per cent fall in sales, though the year to date had resulted in “good growth” for Jameson, Chivas Regal, Ballantine’s and Absolut.

In February, 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.