WAR DELAYS US MARTELL RELAUNCH

Published: 23 July, 2008

By Jack Hibberd

Groupe Pernod Ricard, the third largest wine and spirits company in the world, is to put its full weight behind the brown spirits brands it acquired from Seagram, in an attempt to drive growth in 2003. Speaking at the unveiling of the full-year results in London last week, joint managing director Pierre Pringuet said that the brands had been neglected' under Seagram, and that a big marketing and promotional spend is needed to rejuvenate the underperforming brands. Both Martell and Chivas Regal suffered sales slumps of around 10% in 2003 (although a proportion of this was caused by destocking), with only malt whisky brand Glenlivet showing growth (+2.3%). The planned relaunch of Martell in the US will have to wait, however, as the bad feeling generated in America by Jacques Chirac's opposition to the war in Iraq has persuaded the group to wait for a more favourable climate. Of the brands owned by Pernod Ricard before the Seagram carve-up (with Diageo), Jacob's Creek continued to perform well, with a growth rate of 21% over 2001. Worldwide sales of the brand in 2002 grew from 5.3 million cases to 5.9 million cases, despite Jacob's Creek, according to Pringuet, not following some of the discounting tactics practised by our Australian competitors'. Jameson's (+6.5%) and Havana Club Rum (+11.6%) also continued to grow. Overall, the group's results were healthy, with operating profits rising 67% to E750 million, following the successful integration of Seagram. Sales from its wine and spirits arm rose 78% to e3.4 billion. Due to the 'uncertain geopolitical and economic situation' guidance on future earnings was reserved.

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