Pernod May Sell Some Whisky Brands

[John]

French drink giant Pernod Ricard could sell off some of its whisky brands, but not its three key labels, it emerged yesterday.

Chief executive Pierre Pringuet said Pernod planned to dispose of "important but not indispensable"? brands within its drink portfolio plus other assets such as property.

Last week, the Paris-based group said it was selling Wild Turkey Kentucky bourbon to Campari for about £380million.

Pernod is offloading products which are not among its 15 strategic brands as parts of efforts to repay debt taken on last year to buy Absolut vodka maker Vin and Sprit.

Whisky brands Chivas Regal, The Glenlivet and Ballantine's are all among the 15, so are not in any danger of being sold.

But Pernod's complete portfolio also includes blended whiskies Royal Salute, Clan Campbell, Something Special, Passport, 100 Pipers, Imperial and Long John, as well as the Aberlour, Glendronach, Strathisla, Longmorn, Scapa and Tormore single malts.

Pernod Ricard spokesman Francisco de la Vega said the disposal of whisky brands other than those among the strategic brands could not be ruled out.

He was speaking after the company launched a £900million-plus rights issue to help it to slash debt and planned for a swift improvement in sales following a third-quarter slump.

Shareholders will be able to buy three new shares for every 17 held at a price of £23.50 each, a 36% discount to the closing price on April 14.

Pernod, the world's second-largest spirit group after UK giant Diageo, is saddled with net debt of more than £10.6billion.

It blamed a 12% year-on-year drop in like-for-like sales during the three months to March 31 on buyers slimming down stocks, particularly in big markets such as America and Russia.

Mr Pringuet said trading in the past few months was well below the global trend in spirit consumption during the first three months of 2009, which he described as "flat to slightly down", adding: "We believe our sales for the current quarter will be more in line with consumer demand."?

Mr Pringuet estimated global consumption in bars and restaurants had slumped by 10-15% in the first quarter and said duty-free sales had also fallen as a result of a worldwide downturn in air travel.

The Pernod CEO estimated that global consumer retail sales had risen by about 2% as more people were drinking at home amid the economic depression. Figures for the nine months to the end of March showed that net sales of The Glenlivet were up by 7% from a year earlier, while net sales of Chivas Regal and Ballantine's had declined by 1% and 4% respectively.

John

Source: Press & Journal