Pernod Ricard hit by slowing Chinese sales

FRENCH drinks behemoth Pernod Ricard has cut its profit growth target for the current year following a sales slowdown in China.

The owner of Chivas said it remained confident over the medium and long-term prospects. Picture: Getty
The owner of Chivas said it remained confident over the medium and long-term prospects. Picture: Getty

However, the owner of Paisley-based Chivas Brothers said it remained confident over the medium- and long-term prospects for its second-largest market, where sales have been hit by the slowing economy and a crackdown on lavish spending by Chinese government officials.

Sign up to our daily newsletter

The i newsletter cut through the noise

Pernod, which counts Absolut vodka, Mumm champagne and The Glenlivet single malt among its key brands, now expects underlying operating profits to grow between 1 and 3 per cent for the year, compared with the 4 to 5 per cent growth it forecast in October.

The downgraded growth target came as the Paris-listed group reported a 7 per cent fall in first-half sales to €4.57 billion (£3.75bn), reflecting an 18 per cent slump in Chinese sales, but a tight rein on costs helped operating profits rise 2 per cent to €1.36bn.

Sales of The Glenlivet grew 10 per cent on the back of higher prices, but Chivas Regal fell 4 per cent.