Business as usual for Pernod Ricard as government warns firms to ‘get ready’ for Brexit
The UK government is warning citizens and businesses alike to “get ready” for a no-deal Brexit, but French alcohol giant Pernod Ricard still doesn’t see the looming prospect as one that will impact its long-term marketing plans.
Pernod will continue to focus on customers who want to drink “less, but better” via “super-premium” brands like Malfy gin
Amid a gloomy outlook for the advertising marketing post-Brexit, the business is plotting a £5m media blitz in the run up to Christmas to promote flagship brands like Chivas, increasing its above-the-line investment by 37%.
The group’s UK managing director David Haworth has held firm in his stance that Pernod won’t reduce its ad spend in the country post-Brexit.
“Honestly, I don’t know what’s going to happen but we’re not here for the short-term and we have no plans to change anything,” he told The Drum during a press briefing on Tuesday (3 September).
“Life goes on and I think most people just want [Brexit] over with and once it’s over with we will all just go back to normal. But there’s no change [to our marketing plans] at the moment.”
Insisting that the UK would remain a vibrant spirits market for years to come, he detailed how the group would continue to focus its efforts on customers who wanted to drink “less, but better” via “super-premium” brands like Monkey 47 gin and Rabbit Hole Whiskey, which it recently acquired a majority share in. It's also recently snapped up Malfy gin within the same category.
Along with L’Oréal, Pernod Ricard has been among the businesses shipping extra stock between Britain and continental Europe as part of its no-deal contingency plan.
“We’re pretty well prepared for the end of October,” said Haworth, acknowledging that there may be a few “short-term hiccups” if imports and exports are affected for “more than four or five weeks”.
Jean-Christophe Coutures, chairman and chief executive at Chivas Brothers, said that since Brexit had been “the norm” for some time the business was ready for 31 October deadline.
“I understand from what the government is saying that they are ready to facilitate the logistical flow [of imports and exports] and they are taking action in this context,” he added.
Year-on-year Pernod Ricard has reported sales of €9.1bn, with a sales jump of 5.3%. India and China outperformed the US and Europe noting growth of 20%, against the latter’s 1%.
Business leaders warned on Tuesday that a no-deal Brexit would be “detrimental”, urging the government to avoid the scenario and make trade with Europe as “straightforward as possible”.
This week, business secretary Andrea Leadsom unveiled a £10m grant scheme for business and trade associations to help them prepare for the UK’s exit from the EU.
Earlier this year, Enders cautioned that a no-deal Brexit could plunge the ad industry into its first recession since 2009, with spend from brands forecast to decline by 3% to £22.45bn – leaving a £1.36bn hole in the market.
With less than two months before the UK is due to leave the EU, MPs efforts to block a no-deal Brexit and two court cases could blow Boris Johnson’s no-deal plan out of the water this week.