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Pernod Ricard India Sales Grew 3% During July-September

Pernod Ricard said India sales grew 3% during the July-September quarter, the lowest in nearly two years and blamed it to a high base last year and flooding in a few states. The maker of Absolut vodka and Chivas Regal Scotch has been posting double digit net sales growth since the past few quarters. By category, strategic local brands grew 2%, with softer growth due to very high base for Seagram’s Indian whiskies.

"There was macro-economic environment softening and impact of flooding in the quarter and the growth was on a high base of 34% last year," said Pernod Ricard's finance head Helene de Tissot in an investors call.

India is one of the most profitable regions for Pernod globally and ranks next to the US and China by way of sales. High taxation, restrictive pricing, sporadic prohibitions, regulations, and the general economic environment have hit sales of spirits. in the country.

According to Euromonitor, the Indian spirits industry at around 305 million cases is predominantly skewed toward whiskey, which accounts for 62% of volumes. Around 30-35% of the whiskey market is considered semi-premium and above. Over five years, from 2013-2018, the volume growth of the industry has been modest—at 2% - due to a shift away from the lower end consumption to the prestige and above segment.

"We expect United Spirits to also report a muted performance in Q2FY20, given currently soft demand, increasing competition from Pernod Ricard and continued stress on state finances," said Abneesh Roy, executive vice president of institutional equities, at Edelweiss Research.

Source - The Economic Times


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