Pernod Ricard, the owner of Martell cognac, has lots of other products in their portfolio. But the high-end luxury liquor business is tough at the moment, at least in the establised markets US and Western Europe.

Pernod has a problem in western Europe because sales decline here (and in the US), while having growth in China. So as the ad below says: “The choices we make define who we are”.. Question remains what noble choice Martell will make regarding declining sales.

Martell

Consumers in struggling countries such as Spain and Greece of course do not think of getting the latest high-end XO blend.

Pernod sees difficulties in western Europe

Sales dropped by 10% in western Europe, 6% in America. Analyst Rob Mann (Collins Stewart Plc, London) comments

“The larger trends in Europe and the U.S. remain weak and will undoubtedly hamper the ability of the industry to drive profit growth in 2011”

Mann recommends a “sell” on Pernod stocks, in other words “get rid of that stuff”… while competitor Remy Cointreau is doing quite well. The third drinks player, and the biggest, Diageo also increased its value a little bit.

So Europe is playing a less important role. What about the US? Also difficult. As annonced yesterday, the US government will support the national economy with a boost-activity. Unemployment goes up, and that of course has a certain effect on consumption.

As Cognac Expert reported, Martell’s strategy is to invest into their premium brands – especially in emerging markets such as Russia or South Korea. As China grows and grows – Thailand remains difficult as a cash cow. The political situation does not allow healthy business development.

Source: www.bloomberg.com

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Martell's owner doesn't find consumers in Western Europe

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Max is a spirits expert and speaker, into marketing, technology, startups, and business development. He’s also a farmer. He likes tools and machines, Game of Thrones, and Better Call Saul. Included in his Top 10 Cognacs are the Audry XO and Bache Gabrielsen 1973.Max founded Cognac Expert in 2010 at his family’s estate in Poullignac, in the Cognac region, France. Started as a blog, today Cognac Expert is the world’s largest website about all things Cognac, a blog, and a specialized online shop featuring 800+ different Cognac bottles.

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