Pernod Ricard has refused to be drawn on a report in India suggesting the French giant is looking to sell whisky brand Imperial Blue.
The Ballantine’s Scotch producer said it would not comment on “rumours” about its M&A plans when contacted by Just Drinks.
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According to reports from local business publication Mint, the group is looking to sell Imperial Blue whisky to allow it to focus on brands including like Chivas Regal, Glenlivet and Jameson.
It has allegedly appointed Goldman Sachs to hunt for buyers for the brand.
One source close to the matter told Mint that the sale could be valued at around Rs50bn ($595.4m).
In its financial results for the full year period to the end of June, CEO Alexandre Ricard highlighted India as one of its more successful regions, with the country “for the first time, in terms of net sales” becoming its “second largest market”.
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By GlobalDataPart of the reasoning behind this, he said, India’s strong developing GDP, “very strong and favourable macro fundamentals” and an increasing affluent and middle class, with “25 million people joining the legal drinking age population” a year.
India is also witnessing growing popularity of “Premium plus western style spirits”, he added. During Pernod’s full-year, India’s Seagram whiskies, including Royal Stag and Blender’s Pride were said to have contributed to the 5% increase in sales in its strategic local brands segment.
Net sales in the region grew 6% year-on-year, but the result was still slightly below consensus expectations of 7.5% growth and Barclays‘ 8% prediction.
India’s growth did help the Beefeater Gin brand owner offset the greater 10% dip in net sales from China. The group’s Asia rest of world market recorded 3% organic growth and 4% reported sales decline in the full year to €5bn ($5.5bn).
Speaking to analysts, Ricard said Pernod was still on track to meet its “medium-term” growth goals, which include achieving organic net sales growth in “the upper end” of 4% to 7% and an increase of 50 to 60 basis points in its organic operating margin.
While India saw a “more stable” performance in the full year, Barclays analysts said in a note at the time that as it has a “lower margin than China”, it would be less able to help overcome the current difficulties in that region. He added that this was “one of the key reasons why we believe the 50-60bps framework is unachievable”.
