Pernod remains silent on plans to sell Imperial Blue whisky brand

Pernod Ricard logo on mobile. Credit: viewimage / Shutterstock.com

Pernod Ricard declined to comment on a report in India suggesting the French giant is looking to sell its Imperial Blue whisky brand.

Scotch producer Ballantine’s said it would not comment on “rumours” about its merger and acquisition plans when contacted by Just drinks.

According to reports from a local business publication MintThe group is looking to sell Imperial Blue whisky to allow it to focus on brands such as Chivas Regal, Glenlivet and Jameson.

It is said to have commissioned Goldman Sachs to find buyers for the brand.

A source close to the matter said: Mint that the sale could be valued at around 50 billion rupees ($595.4 million).

In its financial results for the full year to the end of June, CEO Alexandre Ricard highlighted India as one of its best performing regions, with the country becoming “for the first time, in terms of net sales” its “second largest market”.

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He said this was partly due to India’s strong GDP growth, “very strong and supportive macroeconomic fundamentals” and a growing middle and affluent class, with “25 million people joining the legal drinking age population” each year.

India is also seeing a growing popularity of “Western-style and premium spirits,” he added. In FY 2018-19, Seagram’s Indian whiskies, including Royal Stag and Blender’s Pride, reportedly contributed to a 5% increase in sales of its strategic local brands segment.

The region’s net sales rose 6% year-on-year, but the result remained slightly below consensus expectations for growth of 7.5% and Barclays’ forecast of 8%.

Growth in India helped the owner of the Beefeater gin brand offset a 10% decline in net sales in China. The rest of the world market in Asia saw organic growth of 3% and reported sales down 4% for the full year to €5 billion ($5.5 billion).

Speaking to analysts, Ricard said Pernod remained on track to meet its “medium-term” growth targets, which include organic net sales growth in the “high range” of 4% to 7% and an expansion of 50 to 60 basis points in its organic operating margin.

While India had a “more stable” performance over the year, Barclays analysts said in a note at the time that because it had “lower margin than China,” it would be less able to help overcome the current challenges in that region. It added that this was “one of the key reasons why we believe the 50-60bps framework is unachievable.”