Shorts make spirited Irish recovery, says Pernod

PERNOD RICARD, owners of the Irish Distillers Group, said the decline in the Irish spirits market has halted and that the sector is recovering after a dreadful 2003.

That year, the group’s Irish performance was hit by the 20% decline in spirits following the 43% hike in spirit duties in the 2002 Budget.

In the current year the omens are better and the fortunes of Irish Distillers have improved with Jameson showing stellar growth internationally.

Sales of the whiskey in the first half were up by 12%, making it the best performing brand in the group’s broad-based spirits range.

For the group as a whole, the first half of 2004 showed it achieved wine and spirit sales of €1,528 million compared to €1,496 million for the first half of last year.

Overall operating profit for the year should be 7%, the group indicated.

Ireland is having a better year with modest improvements in spirit consumption - up 5% on the first half of last year.

After a very flat 2003, the group is expected to grow its profits in Ireland in the current year, a group spokesman said.

Pernod Ricard refuses to break out the Irish figures for strategic reasons.

Globally, the current sales figures represent a 6% increase on an organic growth basis, which takes into account the impact of foreign exchange.

Its 12 key brands posted a 4% increase in sales volume during the first half of 2004, due mainly to the growth of premium brands: Jameson, Chivas Regal, Wild Turkey, The Glenlivet, Martell, Havana Club.

Asia and the rest of the world again achieved good sales results, up 13.1%. These were driven by Chivas Regal, Royal Salute, Martell Cordon Bleu and Martell XO in Chinese Asia, Royal Stag, a local whiskey brand in India, and Chivas Regal, Jacob’s Creek and Wild Turkey Cola in Australia.

Organic sales growth of 7.8% reflects both the good performance achieved in North America and some recovery in Central and South America, the group said.

In North America, the whole portfolio of spirit brands reported growth. However, this was off-set by a sharp decline in “Ready to Drink” products.

In South and Central America, sales increased in the second quarter, compared to a first quarter that was stable, due to growth in Brazil, Argentina and Central America.

After a stable first quarter in 2004 (0.1% organic sales decrease), the second quarter of 2004 grew by 5.7%, resulting in a 3% growth for the full half year.

Sales grew particularly well in Germany, Greece, Britain and Ireland, with market conditions being tighter in Spain, while sales in Poland remained difficult.

Ironically, France proved difficult for the group, reflecting the poor state of the economy last year.

Sales for the second quarter fell slightly, resulting in 2004 first half-year sales growth of just 1.6%.

Ricard fell by 4% and Pastis 51 by 5%, in line with the anis market.