Pernod Ricard sales drop by 15%

INTERNATIONAL spirits group Pernod Ricard suffered a sales and profits slump in Ireland last year.

Its Irish subsidiary saw spirit sales dip 15% following a 45% tax increase in the 2002 Budget.

That excise hike added 5 to the price of a standard bottle of whiskey in the Irish market.

Joint Managing director of Pernod Ricard, Richard Burrows, described the move by Finance Minister, Charlie McCreevy, as "a whacker" yesterday.

But 2004 ought to bring better times as markets in the US and Europe show definite signs of improvement. Meanwhile the French based Pernod Ricard Group reported a 12% rise in 2003 net profits.

The world's third biggest spirits group said its full-year net profit totalled 464m compared to 413m the previous year.

Operating profit declined under the impact of the euro's strength and divestments of 739m during the year.

Pernod, ranked third in the global drinks stakes after Diageo and Allied Domecq, beat its own target for a 5% rise in 2003 pre-tax, pre-exceptional profit which rose 6.8% to 638m.

It has forecast growth in operating profit for this year before the impact of currency effects are taken into account.

In the year under review wine and spirits sales amounted to 3.4 billion, while operating profits improved to €737m, despite the negative currency effect of €83m on the overall figures.

Its portfolio of premium brands and a solid presence in high growth markets leaves the group confident for the future, said Patrick Ricard, chairman and chief executive officer of the company.

On a constant exchange basis the group should achieve a growth in operating profit, he said.

Meanwhile Mr Borrows who was boss of Irish Distillers when the company was taken over by Pernod Ricard, said he was confident of better times in the Irish context.

It was his view that the impact of the €5 increase in the price of a bottle of spirts last year has been absorbed and the improving Irish economy should lead to a better performance for the group.

"There is reason to believe growth could come back into the Irish economy this year, Mr Burrows said.

For strategic reasons Pernod refuses to break out its Irish operating figures in the context of the overall results.

Mr Burrows said Jameson, now marketed by the group globally as a premium whiskey brand, has been turned into one of the biggest selling whiskies in the world.

Summing up Mr Burrows said the Irish outcome for the year just gone could best be described as the business taking a "hit at home combined with a good export story".

With tourism picking up, provided the Madrid bombings haven't set it back in the meantime, Mr Burrows said there were grounds for optimism for 2004.

Further encouragement can be taken from the pick up in France and Ireland, suggesting Europe in general is also on the move, he said.