Pernod Ricard’s Q3 results show strong growth in its wine sales, driven by leading Rioja label Campo Viejo.
The group’s strategic wines grew “dynamically” according to the group, jumping 7% over the quarter to March 31.
Growth was driven by Campo Viejo, which is one of the leading Rioja brands in the UK and garnered interest with its first Tempranillo blanco launched at last year’s Wine’s from Spain tasting.
Pernod Ricard, which is usually referred to as a spirits maker, counts Jacob’s Creek, Brancott Estate, Campo Viejo and Kenwood wines among its wine portfolio, as well as Mumm and Perrier- Jouët champagnes.
At the end of last year, the group announced it would be selling the Domecq brand and its related brandies and wines to Emperador Group and Gonzalez Byass.
At the time, the group said the disposal was part of a strategy to simplify its portfolio and focus on its priority on spirit brands such as Absolut vodka and Chivas Regal scotch and also wine.
Overall, Pernod Ricard’s Q3 results showed strong growth in east and western Europe, although sales dropped 2% in Asia thanks to hurdles in its two key Asian markets.
The world number two in wines and spirits is still feeling the impact of demonetisiation in India, its second biggest Asian market behind China.
In India, which accounts for about 10% of Pernod’s group revenue, a government ban on high-value bank notes held back local consumption as well as a ban on alcohol sales near highways in force since April 1.
The timing of the Chinese New Year also contributed to the 2% decline in Asia.
Group-wide organic growth reached +3%, an expected slowdown following Q2 and Q3.
Performance was strong in Europe +7%, with reported solid sales in Western Europe solid and recovery in Eastern Europe.
Speaking of performance for the first nine months of FY17, Alexandre Ricard, chairman and CEO, said: “We have strong year-to-date sales growth at +4%. In an uncertain environment, our strategy is consistent and driving results, in particular in terms of diversifying the sources of growth.”
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