Whisky sales take shine off Pernod's Q1 profit

SHARP sales declines at flagship Scotch brands Chivas Regal and Ballantine's have taken some of the sparkle out of first-quarter trading figures at Pernod Ricard.

The French drinks giant, which ranks as Scotland's second-biggest whisky producer, behind Diageo, signalled early signs of an upturn in some markets yesterday and topped market forecasts with a 4 per cent fall in underlying sales.

Highlights included Martell cognac, which enjoyed a 13 per cent hike, and Havana Club rum where sales rose by 6 per cent.

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However, there were year-on-year falls of 7 per cent and 15 per cent for Chivas Regal and Ballantine's, respectively, while sales of Absolut vodka fell 7 per cent.

Major drinks producers have been struggling in the face of the global downturn, turning increasingly to more resilient markets such as South America and Asia as European sales lose their fizz.

Pernod chief executive Pierre Pringuet said Europe, which accounts for nearly a third of group revenue, saw an underlying sales decline of 11 per cent and "remains the region most affected" by the economic downturn.

He added that the group's first-quarter performance "strengthens our confidence for the current financial year and our determination to increase advertising and promotion investment in our strategic brands".

The firm said Ballantine's had declined in Asia and eastern Europe but "maintained its position" in western Europe.

During the first quarter, Chivas Regal sales in the Far East were hit by the transfer of distribution from Kirin to in-house operation Pernod Ricard Japan and "difficulties in Russia".

An underlying sales decline of 4 per cent across the group compared with analysts' forecasts for a 4.7 per cent fall between July and September and rival Diageo's 6 per cent dip for the same period.