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No impact from US boycott, claims Ricard

15-Apr-2003

Patrick Ricard, CEO of French wine and spirit group Pernod Ricard, has said that there has been no material impact on the company's business from the boycott of French goods in the US.

The unofficial boycott following the high profile falling out of France and US over Iraq has not affected Pernod Ricard, according to the company's chief in an interview with the French newspaper La Tribune.

 

While January and February were difficult months in France, the company's performance in the rest of the world more than made up for the shortfall, and Ricard told the paper that March was likely to be a good month as well.

 

"All in all, products owned by French companies are under no real threat," he said in the interview. "On the other hand, products which are symbolically French [such as cheese or wine] are in a more delicate position. If there was any Pernod Ricard brand likely to suffer, it was Martell Cognac, since 27 per cent of the brand's sales come from North America. But it is impossible to tell if the brand has suffered at the moment."

 

It is ironic, therefore, that the place where the company's brands have really suffered is France itself, with a sharp decline in away-from-home consumption in January and February, not helped by poor weather across much of the country in the early part of the year.

 

Thankfully, the group performed well in the rest of the world during this period, Ricard said. "Everything is going well in Asia, at the moment," he said, adding that there was as yet no impact on the company's performance from the outbreak of SARS.

 

As with most companies doing business globally, Pernod Ricard is continuing to suffer at the hands of the weak dollar - in fact, the US currency has had a far greater negative effect on the company than any US embargo.

 

Ricard told La Tribune that the dollar could continue to impact profits when translated into euros, but that it would not affect turnover, as most of the company's Asian sales, all its whisky turnover and all its North American businesses are reported in dollars.

 

"We are fortunate in the respect that all this turbulence is happening at the time of year when sales are always at their lowest," he concluded. "The group makes 40 per cent of its profits in the first half, and of the remaining 60 per cent, half comes in the final two months of the year."