The French owner of Scotch whisky firm Chivas Brothers reported a 7% slump in first-half profits yesterday and unveiled plans to slash nearly £370million off its costs over three years.
Paris-based Pernod Ricard said the new cost-cutting drive, its Allegro project, was aimed at delivering “further operational efficiency”.
The company, which also cut its full-year profits target, gave no details of how it planned to make the £123million-a-year savings.
A Pernod spokeswoman told the Press and Journal that Allegro was a long-term project, adding: “Numerous options are being considered. No decisions have been taken. All entities are involved and will contribute to the project.”
Whisky brands produced by Paisley-based Chivas include blended best-seller Chivas Regal, as well as The Glenlivet, Ballantine’s and Royal Salute.
Chivas Regal and Ballantine’s – two of Pernod’s 14 flagship brands – both suffered a 4% fall in global net sales by value during the first half of Pernod’s 2013-14 trading year.
Volume sales of Ballantine’s, however, were up by 2% – in contrast to an 8% drop for Chivas Regal.
Sales of Royal Salute were down by 11% by value and 10% by volume.
But The Glenlivet, distilled near Ballindalloch, on Speyside, continued to quench the thirst of whisky drinkers worldwide in growing numbers.
It was one of the star performers – behind Jameson Irish Whiskey – in Pernod’s figures for its top 14, with value and volume sales up by 10% and 1% respectively.
Total net sales for all group brands, which also include Absolut vodka and Beefeater gin, fell by 7% to £3.74billion. Pernod said sales were impacted mainly by the market in China, where the value of sales plunged by 18%.
Chief executive Pierre Pringuet said: “As a result, we are issuing new guidance for FY 2013-14; organic growth in profit from recurring operations between 1% and 3%.”
The new guidance on profits compares with an October forecast of 4-5% annual growth.
First-half profits from continuing operations fell to about £1.1billion, from just under £1.2billion a year earlier.