The chief executive of one of Ireland’s largest drinks companies has called on the Government to reduce excise in the forthcoming Budget to stimulate growth of the drinks industry.
Anna Malmhake, chairman and CEO of Irish Distillers Pernod Ricard, producers of Jameson whiskey, said that the outlook for the Irish drinks industry is "extremely concerning", and she pointed to the "penal" excise increases since 2013.
“A reduction in excise would give welcome relief to both hard working Irish consumers and the tourist trade visiting our country while also stimulating the growth of an industry which has huge opportunity for job creation,” she said.
Ms Malmhake said that Ireland is one of the most expensive places in the world to buy Irish whiskey, at €41.68 for a bottle of Jameson, compared with € 27 in the US, and € 25.10 in Germany.
“One has to ask, how sustainable is the current international growth of Irish whiskey without a solid local market in which to support home grown brands as well as new market entrants,” she said.
While she acknowledged Ireland’s “complex societal relationship” with alcohol, she urged the government to first reverse the excise increase from Budget 2014 in order to “ensure the future commercial viability of drinks related enterprises in Ireland”, and secondly seek to tackle the serious issue of alcohol misuse.
Meanwhile Irish Distillers owner Pernod Ricard, the world’s second-largest distiller, said a recent improvement in the Chinese spirits market is unlikely to last as the company reported full-year profit slightly below analysts’ estimates.
The market in China continues to decline at a "high single-digit" pace, chief wxecutive officer Alexandre Ricard said in an interview Thursday, sparking concern over business in Asia, where Pernod gets more than a third of revenue. "Given the recent volatility, we are still expecting some further decline in the short-term," he said.
Pernod has been weighed down by a crackdown on lavish spending by China, which this week cut interest rates amid a slowing economy. As demand for premium cognac has plunged, the Paris-based distiller has started pushing less expensive liquors such as Ballantine’s whisky. Business in Asia improved during the first half, with sales rising 4 per cent.
Pernod shares fell 1.9 per cent to €92.01 in early Paris trading, missing out on a rebound in European stocks. France’s benchmark CAC 40 Index jumped 2.5 per cent. The distiller reported first-half profit from recurring operations of €2.24 bn, compared with analyst predictions of €2.26 bn.
(Additional reporting Bloomberg)
