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Pernod Ricard consolidates business in France

Published:  03 October, 2019

French giant Pernod Ricard is consolidating in an effort to cut costs after it emerged that sales in France have fallen by €60 million (£53.4 million) over the past two years.

In a statement, the Absolute and Campo Viejo producer said it will merge its two French businesses, Ricard and Pernod, next year in a move which will see some 280 members of staff be put forward for voluntary redundancy.

Until now, the Pernod and Ricard subsidiaries have operated as two separate distribution networks, which the company said had become “overly complex and lack[ing] agility”.

The new consolidated outfit will be known as Pernod Ricard France with the merger due to officially complete in July 2020.

Pernod Ricard seems to have fallen victim to an increasingly competitive marketplace over the past couple of years, with deflationary pressures and the French food law, Egalim (which aims to level the playing field between producers and large-scale buyers) all having an impact of profit.

The re-structure will take a three-pronged approach: unifying the two portfolios, moving from two distribution networks to one, and finally, looking at human resources.

Around 280 roles will be open to voluntary redundancy across sales and marketing.

However, the company also said there will be "new career development opportunities for employees with the planned creation of around 90 new roles" to support the new strategy.

As part of the restructure, the company is also disposing of several “non-core brands” in its portfolio, including sparkling wine brand Cafe de Paris.

Philippe Coutin, chairman of both Ricard and Pernod, said: “Throughout our history, the companies Ricard and Pernod have managed to evolve and reinvent themselves to continue the entrepreneurial adventure embarked upon by our founders. We have always succeeded together and together we will rise to this challenge.”

The restructure was announced to shareholders and the press with the heading 'Reconquer!' as the company aims to “return to growth in a French market undergoing major change".

“We want to win back the French market and its consumers, in other words, to recreate conditions for value growth in an increasingly competitive market undergoing accelerated change,” the statement read.