Pernod Ricard divests for key-brand drive

Through its Pernod Ricard España arm, the beverage maker announced on Friday that it had agreed to sell brandy labels like Carlos I, Carlos III and Felipe II and the La Ina Fino and the Rio Viejo Oloroso sherry to distribution partner Osborne. Pernod Ricard says that the sale reflects the company's aims of concentrating solely on core brands, which has been a key growth driver for the group in recent years. All sold off brands will continue to be produced by Beam Global in Jerez, the company added. Under further conditions of the sale, the group will continue to work with Osborne in distribution of its brands into specific global markets, with the company retaining rights to supply the divested brands in the Philippines and a few other markets. This will extend a number of existing agreements between the two companies. Currently, Osborne works with Pernod Ricard in the Spanish market to push the Seagram brand into the country. Conversely, in a number of Latin American markets, Pernod Ricard distributes Osborne's 103 brandy. Yesterday's sale reflects a core focus by the group to streamline its portfolio to core-branded products, a strategy the company claims allowed it to boost global sales by 5.9 per cent to €3.7bn for the six-month period ending 31 December. Company chairman Patrick Ricard said that the performance of the company's 15 key brands had led the company to lift its full year operating profit outlook by two percentage points to 12 per cent. The company's expansion ambitions also appear to reflect this optimistic market within the premium spirits and liquor segment. In December, a company spokesperson told BeverageDaily.com that it would attempt to purchase either Absolut or Stolichnaya in a bid to add a premium vodka label to its portfolio, though a finalised acquisition plan has yet to be decided.