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Pernod Ricard exploring ‘divestment’ options for wine assets

Published:  06 October, 2023

Pernod Ricard, the world's second-largest wine and spirits seller, is reportedly relinquishing three of its most-prized wine assets. 

The French-based conglomerate grew its net sales by 10% (€12,137m), in its FY23 performance review, although this was in large part due to the success of its international spirits brands. 

By contrast, wine only represents €1 in every €25 of Pernod Ricard’s revenue, though earnings in its strategic wines division were up by 2% in FY23, primarily driven by Jacob’s Creek and Campo Viejo in the UK and North America.

However, according to several reliable sources, Jacob’s Creek, Brancott Estate and Campo Viejo are all allegedly up for sale.

A spokesperson for Pernod Ricard told Harpers: “Pernod Ricard notes the recent market rumours regarding its potential divestment of its wine activities in Australia and New Zealand. Pernod Ricard regularly assesses and evaluates its strategic opportunities and is continuously exploring options, including divestments or the streamlining of some or part of individual business units. 

“This is a usual process in line with management’s mission of delivering value to shareholders, employees, clients and stakeholders. Pernod Ricard nonetheless highlights that, at this stage, no decision has been made regarding any particular action.”

According to a 20 September report in the Australian Financial Review, Pernod’s ‘divestment’ options include its two leading southern hemisphere brands – Jacob’s Creek and Brancott Estate – plus its Spanish wines Campo Viejo and Ysios.

The news follows unprecedented growth for Pernod’s spirits brands, most notably Chivas Brothers, which recorded its strongest financial performance in a decade, with a 17% growth in net sales. The brand was the leading contributor to Pernod Ricard's growth in FY23.

The brand’s success was driven by its core aged-range. According to IWSR Drinks Market Analysis, Chivas Regal 18 was the leading 18-year-old blended Scotch globally, in terms of volume and value in the calendar year 2022.

Strategic local brands such as Seagram’s Indian whiskies and Olmeca were not far behind with a 10% growth in sales.

Meanwhile, speciality brands were up by 8%, courtesy of continued development led by Lillet, Aberlour, Malfy and the Spot Range.

Time will tell whether the French powerhouse will continue to divert its attention towards the spirits sector, amidst the modest returns of its wines by comparison.