Jameson sales soar as China weighs on Pernod's earnings

Sales of Jameson Whiskey rose by 10 per cent in the six months to the end of December while volumes were up 8 per cent.

Jameson's parent, Pernod Ricard, the European distiller whose family scion Alexandre Ricard took the helm earlier this week, maintained its full-year earnings forecast after operating profit stagnated in the first half, held back by a later Chinese new year festival.

Mr Ricard was formerly chairman and chief executive of Irish Distillers from 2008 to 2011.

Sales excluding acquisitions, disposals and currency fluctuations at Pernod Ricard rose 1 per cent in the six months through December, compared with a 0.4 per cent increase estimated by analysts. Operating profit excluding some items was little changed at €1.36 billion.

Pernod, the maker of Absolut vodka and Chivas Regal whisky, has been held back by a slowdown in emerging markets and a shift by drinkers from vodka to whiskies and craft beer in key markets, such as the US.

The distiller has introduced lower- priced cognacs to China in response to the government’s push against lavish spending, and Ricard wants to crank up the company’s new product pipeline to lure new consumers.

“Our sales are gradually improving despite an environment that remains challenging,” said Ricard, whose late uncle Patrick built the anise-spirit maker into the world’s second- biggest distiller.

“Heartened by this encouraging first semester, we confirm our full-year guidance of growth” in adjusted operating profit of 1 percent to 3 per cent.

Top 14 Volume of Pernod’s so-called Top 14 brands, which include Jameson, Kahlua liqueur and Beefeater gin, rose 2 per cent, though sales were flat due to a more competitive market, Pernod said.

Analysts are looking to Chinese New Year, which starts Feb. 18 and lasts for a week, as a key barometer of demand in the world’s second-biggest economy.

The holiday occurs later this year, and excluding that effect, first-half organic sales rose 2 per cent, Pernod said. Last month Diageo, the world's biggest distiller, said scotch sales in China plummeted 22 per cent in the first half of its fiscal year. Sales of Remy Cointreau's cognac fell 9.3 per cent in the first nine months its fiscal year, although demand improved by 0.4 per cent in the most recent quarter.

Additional reporting: Bloomberg