Wine and spirit giant Pernod Ricard has posted a 12.5% rise in profits but warned the drinks industry has a tough year ahead.
The French-owned company has predicted ‘an overall stagnation of the wines and spirits industry’ in the next 12 months, echoing the forecast made by rival Diageo just 10 days ago.
While the company posted a profit thanks to its vodka brand Absolut, its major wine brands all suffered as retailers and distributors reduced stock levels in response to the economic downturn.
Its premium Champagne brand Perrier Jouët was worst affected, posting a 13% fall in volumes while its more affordable Champagne brand G H Mumm registered slight volume growth in all markets except the Americas.
New Zealand brand Montana was also hit by a 13% fall in shipments with severe ‘destocking’ blamed for a massive 25% decline to the US. Its major Australian brand Jacob’s Creek remained more stable with volumes down just 2% worldwide.
The figures follow Diageo’s annual results which showed its premium wine sales were experiencing hard times. CEO Paul Walsh issued a similar warning to Pernod Ricard for the year ahead. ‘While the global economy appears to be stabilising, there is still uncertainty as to the sustainability and pace of any recovery and 2010 will be challenging,’ he said.
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Written by Rebecca Gibb