Glenlivet Sales Up But Cheaper Scotch Feeling The Pinch

[John]

Pernod Ricards top end whisky brands are growing but sales of cheaper Scotch are feeling the pinch from a global economic backdrop the firm cautioned will remain difficult into next year.

The company said it would focus on making disposals and generating cash as it seeks to reduce its 10.9bn debt pile.

Pernod Ricard posted 4% organic profit growth to 1.8bn (£1.2bn) for the year to the end of June but warned that the conditions that hit sales in 2009 could continue.

The world's second largest spirits group posted a 3% decline in organic sales over the fourth quarter of its financial year ended 30 June.

This was better than the 12% year-on-year slump the quarter before and took it to a decline of 0.4% for the year.

The Glenlivet, the world's number two single malt whisky brand, posted net sales organic growth of 7%.

It saw shipments to the United States, where it is the number one Scotch brand, stable and boosted sales in Asia and Latin America.

Its other key whisky brands did less well. Sales of Chivas Regal were down 2%. The cheaper 12 year-old malt saw sales fall 6%.

The company blamed destocking and withdrawal of the Olympics effect in China. Sales also fell in Spain, Greece and the United States.

But the more expensive Chivas Regal 18-year-old and 25 year-old saw sales rise 2%. With sales of 2.5m bottles last year, Pernod Ricard claims the 18 year-old now leads the global ultra premium Scotch category having tripled its sales since 2004.

Ballantine's also struggled with sales down 5%.

"For 2009/10, Pernod Ricard anticipates a general economic environment that will remain difficult and an overall stagnation of the Wines & Spirits industry, with contrasting situations depending on countries and categories," Pernod said.

John

Source: Sunday Herald