The changing face of Pernod Ricard

rance's leading wine and spirits group has become number two worldwide following its purchase of Allied Domecq. As a result, Pernod Ricard is making a comeback in Champagne, all the while extending its selection of foreign wines.

From aniseed to whisky

Thirty years after the merger between Pernod and Ricard, the group founded by Paul Ricard and managed by his son Patrick has hoisted itself up from third to second position in the world of wine and spirits. On July 26, Pernod Ricard closed the deal with former number two, the British group Allied Domecq. This transaction was carried out with the help of the American group Fortune Brands. As a result, Pernod Ricard's turnover has evolved from around 3.5 billion euros to 5.5 million euros - far behind world leader Diageo (12.8 billion euros) - taking control of global brands such as Ballantine's whisky, Beefeater gin, Malibu liqueur and Mumm champagne. Previously focussing on the French market and pastis, the group has since gone global (around 85% of Pernod Ricard's turnover is achieved abroad), and is collecting well-known whisky brands - Ballantine's, Chivas Regal, Clan Campbell, Jameson...).

Return to Champagne

The purchase of Allied Domecq is an excuse for Pernod Ricard to once again get a foothold in the vineyard of Champagne which it had left in 1990 when it sold the house of Besserat de Bellefon. Today Pernod Ricard owns prestigious brands: Mumm (number 3 behind Moët & Chandon and Veuve Cliquot) and Perrier-Jouët, the two of which combined sell over 10 million cases per year (including 72% outside of France). This acquisition will allow Pernod Ricard to offer distributors a complete range of global brands, Champagnes and spirits. It also offers the possibility of penetrating a market witnessing steady growth: over 300 million bottles of Champagne were sold worldwide in 2004, up 2%. In the United States, a strategic market, sales grew by 6.8%.

A richer portfolio of wine brands...except from France

Paradox: the flagship of the French spirits industry doesn't have one French wine in its portfolio. In buying Allied Domecq, Pernod Ricard ?is continuing to develop its wine business, passing from the 7th to the 4th position worldwide on the quality wines market?, explains the groups in a press release. But aside from Champagne, this development is being limited to foreign vineyards. Pernod Ricard has acquired three brands from Allied Domecq's former New Zealand subsidiary: Stoneleigh, Church Road and Corbans. As of now, these will be overseen by Orlando Wyndham, Pernod Ricard's Australian division, which produces the famous Jacob's Creek brand. Pernod Ricard has also acquired a foothold in Spain, through its acquisition of the brands of Bodegas y Bebidas (Campo Viejo, Vina Alcorta, Siglo...) and Marques de Arienzo, one of the Rioja's major bodegas. Last but not least, the French group has made its way into Argentina, via its acquisition of the Graffigna and Etchart wineries. Does it plan on investing in France in the near future? Answer: ?The French market is difficult, we don't currently have any investments in mind. However nothing is excluded in the long run...?

Fortune Brands and Diageo do their shopping

Pernod Ricard isn't the only group benefiting from the acquisition. Some of Allied Domecq's strategical brands are going to fall into the fold of America's Fortune Brands and Diageo from Great Britain. The former, an ally of Pernod Ricard in the deal, acquires as arranged, several great Spirits, such as Sauza tequila, Courvoisier Cognac, but also the Californian wines, Clos du Bois, William Hill and Buena Vista, representing a total production of over two million cases per year. ?By adding these brands to the Getser Peak and Wild Horse wineries, we will increase our volumes by four and will become one of the top five American companies selling premium wines?, explained Fortune Brand's CEO, Norm Wesley before the acquisition. When it comes to world leader Diageo, it offered its support to Pernod Ricard, in view of purchasing Montana, the former subsidiary of Allied Domecq for 469 million euros, as well as Bushmills whisky for 295 million euros.