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    Pernod Ricard grew 14% in India during year ended June 2018

    Synopsis

    SC restrictions on the sale of alcohol near state and national highways led to the closure of about a third or about 30,000 of the country’s liquor vends, causing a drop in demand for beer and spirits.

    pernord-ricardAgencies
    Pernod's growth numbers outpace Diageo's Indian business that grew 9% in terms of organic net sales movement during the same period.
    The Indian unit of Pernod Ricard, the world’s second largest distiller, has reported a 14% jump in sales during the fiscal year ended June, helped by a favourable base that saw regulatory challenges impacting local operations. A year ago, the maker of Absolut vodka and Chivas Regal Scotch grew 1%, its slowest ever sales growth due to November demonetisation 2016 and curbs on liquor sales near highways.

    Pernod's growth numbers outpace Diageo's Indian business that grew 9% in terms of organic net sales movement during the same period.

    "India saw a strong performance across portfolio, enhanced by favourable basis of comparison, in improving environment. We maintained market leadershi, with over 45% value market share (bottled in India premium and western style spirits whiskies," Alexandre Ricard, chairman of Pernod Ricard said in an investors call.

    The French firm said it expects a very strong first quarter in India, benefiting from a low comparison base. "There was a significant improvement of Seagram’s Indian whiskies with 13% compared to.3% in FY17," added Ricard.

    India is the second largest market for Pernod Ricard globally — only behind the US and bigger than the home market, France. The French distiller has been expanding its Indian business in double digits for more than a decade, bucking the broader industry trend of slowing growth.

    But its fiscal 2016-17 performance was a departure from its historic sales growth trend and also the first instance of the company expanding slower than its bigger rival Diageo, which posted a 2% rise in sales during the same period. Nearly a quarter ago, Pernod India trimmed over 100 people from its workforce, who have been given one and a half year of severance pay, according to officials.

    Over the past two years, there has been policy changes in West Bengal, Chhattisgarh and Jharkhand to allow liquor sales only through government-owned corporations, similar to states such as Delhi, Rajasthan, Kerala and Tamil Nadu. Supreme Court restrictions on the sale of alcohol near state and national highways led to the closure of about a third or about 30,000 of the country’s liquor vends, causing a drop in demand for beer and spirits. The court subsequently clarified its ruling, easing conditions for liquor sales and allowing many outlets to reopen.



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