Pernod Ricard says to continue exports to Russia; sales fall in Q3

The boss of French spirits group Pernod Ricard said Thursday it plans to continue exports to Russia – apart from Absolut vodka – but insisted it was not business as usual.

Pernod Ricard, which owns Sweden’s Absolut, has faced criticism for resuming some exports to Russia after previously halting them in March 2022 following Moscow’s invasion of Ukraine.

The decision to resume sparked massive criticism in Sweden, including from Prime Minister Ulf Kristersson.

The maker of Sweden’s Absolut vodka however announced on April 18 it was ceasing all exports to Russia after calls to boycott the brand flared up in Sweden and on social media.

Alexandre Ricard, chairman and CEO of Pernod Ricard, said Thursday that the company very firmly condemned the “absolutely appalling” invasion of Ukraine.

He told AFP the group planned however to continue sending alcohol products to Russia “before forming a clearer picture” of the situation.

The Kremlin threatened Wednesday to widen the list of foreign companies subject to temporary asset seizures after ordering the takeover of the local operations of two Western energy groups: Finland’s Fortum and Germany’s Uniper.

“We are going beyond compliance with (international) sanctions” on Russia, Ricard said.

“We are not selling at levels at which we could sell if we wanted, we have stopped a certain number of (local) brands, we have nearly stopped our marketing investments,” he added.

“We were not obliged to do all that and we are doing it,” he said.

Pernod Ricard has stressed that the decision to resume exports was done in part to protect its staff in Russia from “criminal liability” and accusations of “intentional bankruptcy”.

The world’s number two drinks group – which includes Jameson whiskey, Martell cognac and Mumm champagne in its stable of brands – also predicted Thursday a “strong performance” for its financial year as a whole that runs through June amid a recent uptick in its business in China.

It reported a 2.3 per cent fall in sales for its third quarter to the end of March.

At €2.39 billion (£2.11bn) that was below analysts’ expectations for quarterly revenues of more than €2.47bn.

Nevertheless, the company was upbeat about the overall year.

“While the global environment remains volatile and as markets normalise, we are confident in delivering a strong performance for the full year in FY23, with very strong sales expected in our fourth quarter,” chairman and CEO Alexandre Ricard said in a statement.

The company has seen “a nice recovery” in China since March, he told AFP.