Pernod Ricard won’t skimp on advertising because of Brexit, but no-deal would be ‘nightmare’
Pernod Ricard, the drinks giant behind Absolut Vodka and other popular spirits, has described the possibility of a no-deal Brexit as a “short-term nightmare”. Despite that fact, the company says it won’t be cutting back on advertising no matter what happens, and feels that it’s still well-positioned to capture growth. It’s one of many firms, along with L’Oreal and Aston Martin, that has been busy shipping things between the UK and the EU in the run up to divorce date.
Pernod Ricard’s share price has appreciated by 5% so far this year
Source: Yahoo Finance
Jean-Christophe Coutures, the chairman and CEO of Chivas Brothers (a Pernod Ricard brand) has described the so-called ‘Hard Brexit’ (that is: Brexit with no deal, putting a end to the free movement of people and goods) as the “worst thing that could happen,” however, he added that Pernod Ricard was in “a good position to deal with the short-term nightmare it could generate.” That short-term nightmare could include border-delays for imports and exports, as the UK struggles to provide infrastructure it hasn’t needed for decades.
Despite these dire predictions, David Haworth, the company’s managing director in the UK, feels positive about the near future – and the UK market. He recently told advertising industry publication The Drum: “We’ll continue to work as normal. We’re not reducing our advertising and promotion investment. If anything, we’re looking to increase our market share over the next few years. In the UK we’re a challenger, we think we can grow the portfolio we have and continue to invest. So whatever short-term hiccups there are with Brexit, I honestly don’t expect it to impact on our long-term strategic decision-making."
He concluded by saying that the UK was a “strategic market” for Pernod Ricard, saying: “No matter what happens with Brexit, the UK will remain the UK, consumers will remain consumers and our ambition to grow our share here will remain unchanged.”
Dominion holds Pernod Ricard in its Global Trends Luxury Fund.
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