Pernod Ricard expects China rebound

Pernod Ricard expects China’s premium drinks market to rebound in early 2014, the French group’s deputy CEO has said.

Speaking at a results press conference in London, Pernod’s deputy chief executive, Alex Ricard, said the wealth of Chinese consumers ‘basically stalled’ during the drinks group’s last fiscal year, to the end of June.

A new leadership in China has dampened demand for luxury foreign spirits and wines via a clampdown on gift-giving and entertaining among officials. There has also been slower economic growth in general.

Analyst group Sanford Bernstein warned last week that Pernod Ricard is ‘likely to see a continued drag in China’ in the first half of its new fiscal year.

But, Alex Ricard, who is also Pernod’s chief operating officer, told journalists that he is ‘absolutely confident’ of a rebound beyond that. ‘The fundamentals are sound and we expect that rebound to take place in early 2014.’

Some Pernod brands continued to perform well in China over the past year. Jacob’s Creek wine saw a double-digit rise in value sales, while Champagne brand Perrier-Jouet also expanded its reach.

Pernod Ricard’s overall net sales in China still rose by 9% on an organic basis for the year, albeit a slower pace of increase versus the previous year.

Earlier this year, China launched an anti-dumping investigation into wines imported from the European Union, as part of a larger trade dispute with the 28-nation European bloc.

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