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Pernod Ricard pledges western Europe growth

Pernod Ricard has vowed to increase market share in western Europe as the region recovers from the economic downturn and to boost marketing spend on premium brands to attract new consumers.

The world’s second largest drinks group is also considering entering the beer industry in sub-Saharan Africa, according to Laurent Lacassagne, chairman and chief executive of Pernod Ricard Europe.

"Western European markets are still very important for us. We want to gain market share by premiumisation and innovation," Lacassagne said.

Pernod Ricard Europe covers Europe (excluding France and Ireland), the Middle East and Africa. The region was accountable for 30% of group turnover in fiscal year 2009/10.

Crisis-hit markets such as Greece and Spain, where consumers have been cutting spending amid government austerity measures and high unemployment, were tough markets where Pernod Ricard will be both "cautious" and "reactive", he said.

In Greece, where the company’s profits have significantly decreased, the group wants to focus even more on marketing investment on key brands such as Chivas Regal whisky and Absolut vodka, Lacassagne said.

"Greece is still an interesting market. The Greeks are still going out but they are drinking less. They drink more beer and less premium spirits," he said.

Pernod Ricard Europe’s growth will be driven mostly by the fast-growing emerging markets of eastern and central Europe, the Middle East and Africa, which already more than offset difficult times in western Europe, Lacassagne said.

In sub-Saharan Africa, Pernod’s Jameson whisky is now a leading brand in South Africa, but the group is weak in the rest of the region.

Lacassagne confirmed Pernod Ricard is considering entering the beer market after its main rival Diageo built its own spirits network in the region on the back of a beer business.

"It’s question we are considering," said Lacassagne, adding this could be done through a global partnership.

Last month, the Pernod Ricard group posted stronger than expected third-quarter sales, led by strong emerging market growth, and kept its full-year financial targets.

Emerging markets showed like-for-like growth of 15% in the quarter but Europe excluding France declined 6%.

Alan Lodge, 28.06.2011

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