Pernod flags up possibility of new whisky distillery

Chivas Brothers boss Christian Porta has told journalists and analysts today that the next significant development for its scotch whisky business will be to build a new distillery.

The news is hot on the heels of Diageo’s announcement that it is proposing to build a new malt whisky distillery in Scotland.

Porta, who heads up Pernod Ricard’s scotch whisky and premium gin division, was responding to questions at a briefing following the announcement of the group’s 2011/12 full year sales and results last week.

Pushed to put a time scale on the likelihood of Pernod Ricard building a new scotch whisky distillery, all Porta would say was: “at some stage” with a smile.

He told the briefing in London that the re-opening of the Glen Keith distillery next year will add another 6 million litres of capacity on top of the already increased capacity at Glenlivet. Asked about a possible purchase of United Spirits’ Whyte & Mackay business both Porta and Pernod’s managing director, finance, Gilles Bogaert, were tight lipped with a terse “no comment” by way of response.

Porta said the company’s Passport standard blended scotch whisky brand was becoming its flagship brand in emerging markets such as Mexico, Brazil and Russia, coaxing young drinkers away from their traditional spirits, tequila, cachaca and vodka. He said the company had “high expectations” for the brand.

The Pernod team was asked whether the company had made a mistake selling off the Wild Turkey bourbon brand, leaving a gap in the company’ portfolio for an American whiskey, Bogaert refuted the suggestion, saying that Jameson, its Irish whiskey brand and the likes of Aberlour single malt whisky were taking whiskey drinkers away from bourbon.

The inevitable question of the next major takeover, such as of Beam, was batted down by Bogaert. He said: “We do not discount anything. It is an option for the future but not for today.”

Of Pernod’s seven strategic premium spirits brands, the one that has been suffering most is Ballantine’s, the number two scotch whisky brand worldwide. This has been primarily due to the depressed Spanish and French economies and markets.

Denis 0’Flynn, managing director Pernod Ricard UK, said that the company was planning to major on Ballantine’s to promote blended scotch whisky to younger drinkers in Britain, based on its international popularity and it strong links with golf.

On Absolut vodka which Bogaert described as a “must have” brand, he said the Swedish vodka was now number two in Brazil, stealing volume from cachaca with +26% volume growht last year.  He said the brand was also developing in South Korea, India, China and Russia. He said volumes to China were relatively low at about 100,000 cases but “it was a new category and we have to educate consumers in order to market vodka,” he said.

Bogaert also pointed out that China is a significant market for champagne and with its Perrier-Jouet and Mumm brands , it is “ a market where we have ambitions”.

On Africa, Bogaert said the world’s number two premium wine and spirits company, was in the process of setting up partnerships and affliations in Nigeria, Ghana, Kenya, Angola and Morocco. He said Passport was already a 200,000 case brand in Angola. He said the company had “mid to long term”goals based on scotch, Absolut and its champagne brands.

On India, Bogaert said the company was number four by value and had three local whiskies, Royal Stag, Blender’s Pride and Imperial Blue which were grain whiskies with malt from Scotland blended in. But the main charge was being led by Chivas Regal and Absolut, mainly through Travel Retail and the airport hubs such as at Delhi and Mumbai.