World: Pernod Ricard confident of good prospects for whisky in emerging markets

New Chivas Brothers executive chairman Laurent Lacassagne has said the drinks giant must not overreact to sales falls in Asia and he remains "very confident" in the future of Scotch whisky, The Herald reported on September 4.

Parent company Pernod Ricard, the world's second largest spirits group, said it is prepared to make acquisitions to boost its presence in the United States, where its brands including single malt Glenlivet are performing well.

It also believes there are good prospects for whisky in markets such as South Africa, Brazil and Mexico.

Mr Lacassagne was speaking in London days after Pernod revealed that whisky sales had fallen in Asia, where it gets 40% of its revenues, and China, in particular, during its last financial year.

Mr Lacassagne, who previously ran Pernod Ricard Europe, said his experience in the wine industry taught him to be cautious about major strategy shifts.

"The most important thing in terms of distribution is consistency, and not to over react to short-term changes," he said.

"The future of Scotch whisky is very good," he added.

In China, whisky sales have been hit by the economic slowdown and a government clampdown on conspicuous consumption.

Mr Lacassagne said that Pernod, whose whisky brands include Ballantine's and Royal Salute, had been seeking to cater not only to corporate entertaining but was also developing its reach among young drinkers.

"We believe that beyond that short-term trouble, the future of the Chinese market is still very good," he said.

Alexandre Ricard, who was appointed Pernod's deputy chief executive last year, predicted a rebound in the Chinese spirits market.

"The fundamentals of China are fully sound. We expect that rebound to take place in early calendar year of 2014," he said.

Chivas recently reopened the Glen Keith distillery on Speyside and a new distillery at Carron, also on Speyside, is scheduled to open by the end of next year.

A scion of the group's founding family, Mr Ricard will become chief executive in 2015 and made it clear he wants to expand the company's presence in the US, a market in which he believes Pernod is "under exposed".

"The American market is a market we are looking to from an M&A (mergers and acquisitions) point of view."

Mr Lacassagne tipped single malts to keep growing. "There is clearly a malt boom in the world. We see in most markets the malt category is growing very fast," he said.

Pernod is also making a drive into the nascent African spirits market. Mr Ricard denied that arch rival Diageo has an inherent advantage in Africa because it has a distribution network built around beer brands such as Guinness.

04 September, 2013