Pernod Ricard boosts adspend

04 September 2009

PARIS: Pernod Ricard, the French wine and spirits group, registered a 21% improvement in its operating profits for the year ending in June, having increased its advertising expenditure levels by 5% over this period.

The company recorded an operating profit of €1.84bn ($2.6bn; £1.6bn) for the 12 months to June, and described this performance as being "satisfactory" given the "particularly difficult environment".

Revenues also rose by 9%, to €7.2bn, boosted in particular by growth in its home market and the regions of Asia and Latin America.

Its adspend climbed to €1.24bn over the last fiscal year – largely as a result of an uptick of 22% in the Americas – although advertising costs as a share of revenue fell by 0.7%, to 17.2% in all.

This was a consequence of the "declining cost of media", reduced levels of activity in the on-trade and the efforts Pernod made "to increase the effectiveness and targeting of our advertising and promotion expenditure."

While expressing optimism about its own position, the drinks giant warned next year will "remain difficult", with "an overall stagnation of the wine and spirits industry" and "contrasting situations depending on countries and categories."

Despite this, the Paris-based firm said its "brand and market combinations" will continue to "benefit from strong advertising and promotion expenditures" during the next financial year.

The initiatives it has established in this area include new marketing campaigns for Mumm and Jacob's Creek, and redesigned packaging for Chivas Regal 12 years old and Havana Club 7 years old.

It will also launch fresh campaigns for Absolut 2.0, Malibu and Jameson, as well as pursuing the "360-degree" implementation of the "Chivalry" platform which has been adopted worldwide by Chivas Regal.

Furthermore, the company will focus on the "development of digital communication" for all of its 15 "strategic brands", which include Beefeater, Ballantine's and Martell.

Data sourced from Pernod Ricard/; additional content by WARC staff