Pernod Ricard

Pernod flags up possibility of new whisky distillery

04 September, 2012

Chivas Brothers boss Christian Porta has told journalists and analysts today that the next significant development for its scotch whisky business will be to build a new distillery.

The news is hot on the heels of Diageo’s announcement that it is proposing to build a new malt whisky distillery in Scotland.

Porta, who heads up Pernod Ricard’s scotch whisky and premium gin division, was responding to questions at a briefing following the announcement of the group’s 2011/12 full year sales and results last week.

Pushed to put a time scale on the likelihood of Pernod Ricard building a new scotch whisky distillery, all Porta would say was: “at some stage” with a smile.

He told the briefing in London that the re-opening of the Glen Keith distillery next year will add another 6 million litres of capacity on top of the already increased capacity at Glenlivet. Asked about a possible purchase of United Spirits’ Whyte & Mackay business both Porta and Pernod’s managing director, finance, Gilles Bogaert, were tight lipped with a terse “no comment” by way of response.

Porta said the company’s Passport standard blended scotch whisky brand was becoming its flagship brand in emerging markets such as Mexico, Brazil and Russia, coaxing young drinkers away from their traditional spirits, tequila, cachaca and vodka. He said the company had “high expectations” for the brand.

The Pernod team was asked whether the company had made a mistake selling off the Wild Turkey bourbon brand, leaving a gap in the company’ portfolio for an American whiskey, Bogaert refuted the suggestion, saying that Jameson, its Irish whiskey brand and the likes of Aberlour single malt whisky were taking whiskey drinkers away from bourbon.

The inevitable question of the next major takeover, such as of Beam, was batted down by Bogaert. He said: “We do not discount anything. It is an option for the future but not for today.”

Of Pernod’s seven strategic premium spirits brands, the one that has been suffering most is Ballantine’s, the number two scotch whisky brand worldwide. This has been primarily due to the depressed Spanish and French economies and markets.

Denis 0’Flynn, managing director Pernod Ricard UK, said that the company was planning to major on Ballantine’s to promote blended scotch whisky to younger drinkers in Britain, based on its international popularity and it strong links with golf.

On Absolut vodka which Bogaert described as a “must have” brand, he said the Swedish vodka was now number two in Brazil, stealing volume from cachaca with +26% volume growht last year.  He said the brand was also developing in South Korea, India, China and Russia. He said volumes to China were relatively low at about 100,000 cases but “it was a new category and we have to educate consumers in order to market vodka,” he said.

Bogaert also pointed out that China is a significant market for champagne and with its Perrier-Jouet and Mumm brands , it is “ a market where we have ambitions”.

On Africa, Bogaert said the world’s number two premium wine and spirits company, was in the process of setting up partnerships and affliations in Nigeria, Ghana, Kenya, Angola and Morocco. He said Passport was already a 200,000 case brand in Angola. He said the company had “mid to long term”goals based on scotch, Absolut and its champagne brands.

On India, Bogaert said the company was number four by value and had three local whiskies, Royal Stag, Blender’s Pride and Imperial Blue which were grain whiskies with malt from Scotland blended in. But the main charge was being led by Chivas Regal and Absolut, mainly through Travel Retail and the airport hubs such as at Delhi and Mumbai.

Tormore Distillery

Elixir Distillers to buy Pernod Ricard’s Tormore Distillery

22 June, 2022

Elixir Distillers has signed an agreement to buy the Tormore distillery and brand from Pernod Ricard.

The independent whisky specialist, co-founded by owners Rajbir and Sukhinder Singh, made the move to develop Elixir Distillers into a world-leading brand, distiller and bottler.

Sukhinder Singh said: “We are hoping to build on the work that’s been done by Pernod Ricard to bring to life the magic of Tormore and show consumers around the world just what a hidden gem it is. We couldn’t have asked for a better distillery to welcome to the Elixir family alongside our new Islay distillery, Portintruan.

Built in 1960, Tormore distillery is among one of the larger distilleries in Scotland with a capacity of just under five million litres of alcohol per year.

Alexandre Ricard, chairman and CEO of Pernod Ricard said: “The sale of the Tormore brand and distillery follows the recent announcement of our investment behind the Aberlour and Miltonduff facilities, which will increase our Scotch production capacities by 14 million litres of alcohol per annum.”

Tormore distillery has been owned by Pernod Ricard since 2005, with the Elixir Distillers deal including an inventory of aged stock.

Sukhinder and Rajbir added: “Our goal is to establish the reputation of Tormore on the global stage to match the special quality of the whisky. We want Tormore to stand shoulder to shoulder alongside the

Sam and Jay

As far as whisky history goes the history of Strathisla has two parts. The first is the dim, distant past when the distillery was founded in 1786, making it one of the oldest still in existence.¹ The second, and most relevant part, dates from 1950, when Seagrams took over to restore a dilapidated facility and then expand it.  You could argue that the distillery is what it is now because of the vision and investment of Sam Bronfman² and the Chivas years as well as the early years represent the  most significant periods in the distilleries history. But does that mean we have to brush aside the messy bits in the middle?

The take-over by Seagrams in 1950 was not a simple case of Strathisla moving from night to day, or of a sleeping princess being awoken from a long slumber by the kiss of a handsome suitor. History is not a fairy story. It was not a straightforward switch from Mr Dirty to Mr Clean. It is true that the distillery was properly nurtured under the eye of Sam Bronfman,  whereas before it had been neglected. It is true that Sam Bronfman was a proper whisky man who had a detailed knowledge of distilling but there are parallels with the life of Jay Pomeroy than you might expect.

For a start there was their background. Both were Russian Jews whose families lived in the Pale of Settlement. The Bronfman family came from Bessarabia, in what is now Moldova whilst Pomeroy’s came from the Crimea. There was though a significant difference that profoundly affected their identity. Sam Bronfman came to Canada as a baby and was all his life a patriotic Canadian; Jay Pomeroy came to England as a twenty year old and was always identified as a Russian.

They were  both about the same age (Pomeroy was 6 years younger) and both would have been liable for service in the First World War except they were excused military service on medical grounds. Bronfman had flat feet,  whilst for Pomeroy it something more serious, though undisclosed, because his record was marked “permanently and totally unfit”. Goodness knows what it was. Perhaps it had something to do with his heart, which was obviously weak. He had a serious heart attack in 1942 and died from another in 1955 when he was just 60.

They both sought to make their way independently through their own businesses. But here they are not at all similar. Jay Pomeroy was a man alone, whilst Sam Bronfman was surrounded by a close family and started out in the family hotel business, which he later came to dominate, even though he had two older brothers. At the time most Canadian hotels made their all their money from the sale of alcohol in their bars and so Sam got to know the alcohol trade well. It was thus a natural move to set up a company supplying whisky. This is how he progressed and built his businesses –  by building on his core of knowledge and expanding what he knew. He therefore had consistency, a logical thread to what he did, whereas Jay Pomeroy would buy and sell anything, looking for the next good idea. He was not a builder, he was a sole trader, except for those brief, few years when he became an impresario and ran an opera company.

Both sought to profit from loopholes in the law. The history of Sam Bronfman is in many ways the more colourful of the two as he was in the thick of temperance prohibitions and cross-border relationships. It is often forgotten that Canada, as well as the US, had a strong temperance movement and many Provinces went dry before the First World War. Although this was a provincial matter it put the Bronfmans businesses at risk. Sam, though, spotted that sales from out of the province were covered by federal not provincial law. He therefore set up a mail order business based in Montreal, with warehouses in other provinces, and slugged it out with the Hudson Bay Company. Eventually this loophole was tightened so Sam found another one  and sold alcohol through drug stores as medicine. Then there was prohibition in America where Canada was famously the pipeline through which the bootleggers obtained their stock. Sam of course did nothing illegal – he just sold whisky, how was he to know his customers were crooks? This earned his company a lot of money but just like with Jay Pomeroy, the authorities did not forget and later tried to extract some form of retribution.

As a result they both had to fight a number of court cases. Jay lost, Sam won. For example in 1926 he was embroiled in a Royal Commission on Customs and Excise that looked at illegal smuggling and the bribery of officials. He escaped unscathed from this but his brother Harry was prosecuted for bribery. Even though he was found not guilty it was traumatic for the family and the business and became a big political issue in Saskatchewan. The issue of trade in the prohibition years would not go away and a few years later, in 1934, the RCMP prepared charges concerning illegal activities in the prohibition export trade. There was another high profile trial and another acquittal. Sam tended to win things – Jay not so much.

Both of them were a little lax about paying taxes. At the beginning of his business life it seemed to slip Sam’s mind that he needed to pay anything at all. Later his lawyers had to negotiate a settlement, in 1921, to cover his previous negligence. Jay run-in with the tax authorities we know about.

However they were both subject to retrospective claims. The US Treasury, in a rather breathtaking move, tried to recover the tax they thought might be due on the whisky that came into the country from Canada during prohibition. At first it wanted $53 million from all the distilleries involved, with Seagrams liable for $25 million. This was disputed but it was more than a business dispute it was an international issue which had to be negotiated by the two governments. Apparently FDR, himself, was far from convinced his Treasury had a strong legal case and so settled on a figure of $3 million, which then agreed.

These similarities are interesting but superficial because at heart there was a huge material difference between the two men. One was a trader, someone restless in the search of the next deal, but essentially a small scale operator. The other was a highly driven, ruthless businessman who built one of the great business conglomerates of the age. Sam Bronfman in a completely different league. He cared about detail and prided himself on knowing everything about his company. He knew the technical details of making whisky and cared about quality. For Jay Pomeroy whisky was irrelevant, he might just as well have been selling stockings or perfume. He was not in it for the long haul. Sam Bronfman, though, thought strategically.

This crucial difference means there is good reason to restart the history of Strathisla in 1950 and draw a veil over the previous few years. However the similarities in the background of the two men make it amusing that it was Sam Bronfman who took over. The similarities provide a hidden continuity.

Especially as there was one final irony, a twist of fate, from beyond the grave, that united the businesses of both men. Jay, as we know, became consumed with opera, initially under the influence of a beautiful soprano, and lost a lot of his money. Sam was far too austere and driven for any such frivolity – but his heirs? Ha! Show-business exerted a deathly pull.  Sam’s son Edgar, who was the first heir to take over, dropped quite a lot of money on an investment in MGM but that was OK because he also made a deal that gave the company 25% of DuPont, which was a huge cash cow. However when his son Edgar Jr took over he sold the DuPont stake to buy MCA (Universal). It was this deal that ruined the company and is the reason why it no longer exists. Apparently when the MCA deal was going through Edgar said to Edgar Jr “That’s an awful lot of money to pay to get laid.” Jay Pomeroy would have agreed

Chivas Brothers reports strongest sales in a decade

31 August, 2023

Pernod Ricard’s dedicated Scotch business, Chivas Brothers, has announced an increase in net sales of 17% in the 2023 fiscal year, taking total sales to a ten-year high.

Sales were buoyed by the Asia market, which saw 21% growth, led by Japan (+28%), India (+27%), South Korea (+19%), and Greater China (+7%).

Flagship brand, Chivas Regal, saw growth of 25% with particularly strong performances in India and Japan, while Royal Salute sales grew by almost a third thanks to strong growth in the US alongside double-digit growth in core Asian markets.

The Glenlivet, the bestselling single malt brand by volume according to the IWSR, grew by 9%, driven by demand for the brand’s super-premium and ultra-premium ranges.

The Glenlivet continues its upward trajectory with +9% growth and was the best-selling single malt by volume in 2022, according to the IWSR4, setting the brand in strong stead for its 200 year anniversary in 2024. This has been driven by significant demand for its Super Premium and Ultra Premium ranges in an already competitive category, with balanced growth across the brand’s global footprint.

“The historic highs we’re seeing across our strategic brands signal the success of our premiumisation strategy which has enabled Chivas Brothers to outperform the market,” said Chivas Brothers chairman and chief executive, Jean-Etienne Gourgues.

To accompany the end-of-year report, the company has announced £60 million investment in energy and carbon reduction with an aim to achieve carbon neutral distillation by the end of 2026.

“Our highest growth of the last decade reinforces our position to shape the future of sustainable Scotch while continuing to meet demand,” continued Gourgues.

“We have fast-tracked a number of sustainability initiatives to meet our own ambitious targets and remain committed to supporting the industry in ushering in this new era - as we demonstrated earlier this year by making our heat recovery findings open source.”

12 December, 2023

French spirits maker, Pernod Ricard has announced the launch of The Chuan Pure Malt Whisky in China.

It’s the first release from the company’s $150 million malt whisky distillery that opened in Emeishan in the Sichuan province in November 2021, which has opened its Experience Centre to the public to coincide with the launch.

“The inauguration of The Chuan Distillery is the culmination of a pioneering adventure,” said Alexandre Ricard, chairman and chief executive of Pernod Ricard.

“We have blended the natural beauty of the Emeishan landscape in China with the skill and craftsmanship of our distillers to produce a whisky to be proud of. It will shape a new and unique experience for whisky enthusiasts for many years to come.”

The Chuan uses both European and Chinese barley and is matured in ex-Bourbon casks, ex-Sherry, and proprietary Chinese oak casks.

“We are proud to put China on the world map of whisky by presenting this exceptional malt whisky of The Chuan,” said Jerome Cottin-Bizonne, chief executive of Pernod Ricard China.

“As a leading international spirits group, we are committed to proactively responding to the burgeoning enthusiasm and diversified demands of Chinese consumers. “

The Chuan will be available throughout China in selected channels from rrp 888 yuan ($124).

17 July, 2024

By Shay Waterworth

Pernod Ricard has agreed the sale of its international wine brands to Australian Wine Holdco for an undisclosed fee.

Australian Wine Holdco is a consortium of international investors and the owner of Accolade Wines and the transaction includes seven wineries producing more than 10m 9-litre cases annually including Jacob’s Creek from Australia, Brancott Estate from New Zealand and Campo Viejo from Spain.

Closing of the transaction remains subject to fulfilment of customary closing conditions, including regulatory clearances, and is expected to occur during H2 2025.

Jacob’s Creek, Brancott Estate and Campo Viejo have all featured in Drinks International’s World’s Most Admired Wine supplement and more details of the transaction will follow.

The formation of North American Distillers aligns the company’s American whiskey portfolio with operating structures of Pernod’s Irish and Scotch whisky entities, Irish Distillers and Chivas Brothers.

Richard Black, a Pernod Ricard executive who most recently held the position of global managing director of Martell, has joined NADL as chief executive.

Black said, in a statement: "American whiskey is a dynamic spirits category, and our portfolio shows immense potential for future growth. Our investments made in Jefferson's, Rabbit Hole, Smooth Ambler, Skrewball and TX, underscore our ambitious commitment.

“My mission is to harness this potential and drive a singular focus on these brands and our operations, driving us towards our goals and creating a top-tier marketing and sustainable operations team on the back of our peoples’ deep-rooted expertise."

Pernod Ricard initially launched its American Whiskey portfolio as an independent arm within Pernod Ricard USA.

The formation of NADL will see the portfolio grown by a global brand company responsible for global marketing strategy, growth and production, including all Pernod Ricard American North America operations sites.

Joining Black at NADL to head up operations is Pierre Joncourt, current senior vice president of operations for Pernod Ricard North America, and on whiskey and marketing, Kaveh Zamanian, Bourbon Hall of Famer and Rabbit Hole Whiskey.

For the pilot programme, Chivas Brothers has partnered with Bairds Malt (malt producer for the brewing and distilling industry) and Scotgrain (agricultural merchant), to facilitate and further the improvement on farms, and to help future-proof the livelihoods of farmers in regional Scottish communities.

It is also intended to help secure the supply of barley and reduce Chivas Brothers’ indirect carbon footprint.

The pilot programme, named the ‘Dalmunach Growers Pilot Group’, will run over a three to five-year period and initially comprises eight farmers who have voluntarily elected to be a part of the first on-farm trial and will cover various approaches to improvements in soil health and biodiversity.

Ronald Daalmans, environmental sustainability manager at Chivas Brothers, said: “The ongoing impact of climate change means our growers are having to adapt their practices and many are faced with tough decisions regarding sustainable practices, because it is cost prohibitive to implement new techniques without certainty of how they’ll affect crops through the growing cycle.

"Working together makes us stronger, not only to reduce carbon emissions at pace, but also to provide invaluable insights that can benefit the farming community at large,” Daalmans added.

Pernod to offload Imperial Blue whisky

05 September, 2024

Pernod Ricard has drawn plans to sell its Imperial Blue whisky according to multiple reports in India.

While the French spirits maker hasn’t yet commented, reports indicate that it has enlisted Goldman Sachs to find a buyer for the brand in a sale that could fetch Rs 5,000 crore (roughly GBP £450 million).

The brand is the group’s second bestselling Indian whisky, behind Royal Stag, having sold 22.8 million nine-litre cases in 2023 according to the Drinks International Millionaires’ Club, but despite impressive sales, volumes have been in decline since 2019.

Reports indicate that the sale represents a change of focus in the region, with Pernod Ricard focussing on driving its premium portfolio including Glenlivet, Jameson and Chivas Regal.

The potential move mirrors a strategy adopted by Diageo when it sold off 32 of its low-margin, Indian-produced brands to Inbrew Beverages in 2022