Jobs to go at Martell

- Last updated on GMT

Related tags: Pernod ricard

Martell, the latest priority brand to join the Pernod Ricard
stable, will see a quarter of its workforce axed in the coming
months, a move Pernod says is necessary to keep the company
competitive.

Martell Cognac was one of the main drinks brands acquired in 2000 by Pernod Ricard as part of its joint takeover of the Seagram drinks business. Since then, the company has merged Martell with its other Cognac business, Renault-Biscuit, and has focused its efforts on continuing the work begun by Seagram to revitalise the brand.

Part of that revitalisation will, however, have a significant impact on employees at the company. Last Friday the company announced a significant reduction in staff numbers at the Martell business in the heart of the small Charentais town of Cognac. Some 113 of the 465 people working there will lose their jobs, nearly a quarter of the workforce.

The news, not surprisingly, has met with dismay in Cognac, especially given Pernod Ricard's repeated declarations that Martell was one of its priority brands and that as such it would receive significant investment. While Pernod has an extensive range of products, its priority brands, such as Jameson Irish whiskey, Wyborowa Polish vodka or Chivas Regal Scotch (also part of the former Seagram business), have long been the main drivers of growth at the company and the focus of most of its investment.

Martell is the world's third largest Cognac brand, behind Hennessy and Courvoisier, but sales have dropped since Pernod's acquisition of the brand as a result of significant overstocking - in the first quarter of the year, Martell sales fell 18 per cent.

The restructuring programme at Martell will involve the loss of 149 jobs but the creation of a further 36, moves which the Pernod Ricard management claim are necessary in order to maintain the competitiveness of the brand.

It is as yet unclear what proportion of the losses will come from Martell and what from Renault-Bisquit, although since Martell is more than five times larger than its partner, the likelihood is that it will bear the brunt of the losses. Pernod has nonetheless confirmed that the losses will come in both the administration and the production arms of both companies, and that the restructuring will also see the merging of both firms' bottling operations at Renault-Bisquit's site in Rouillac.

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