Chivas Brothers: Tariffs and turmoil knock sales at Scotland’s number two whisky producer

Chivas Brothers, which forms part of French drinks empire Pernod Ricard, saw total net sales fall in the first six months of its financial year to the end of December.

The global spirits sector has been buffeted by US trade tariffs, inflationary pressures and changing preferences among drinkers.

Chivas said its “geographic scale and diverse portfolio” had supported the overall first-half performance against a backdrop of a business environment of contrasting market conditions in different regions.

It flagged “positive momentum” in a number of key markets including India, where net sales rose 10 per cent, and Turkey, which enjoyed a 32 per cent hike. Flagship blended Scotch brands Chivas Regal and Ballantine’s core range were both broadly flat in the first half, and The Glenlivet single malt “outperformed its competitive set” in the US.

Nodjame Fouad, chief executive, Gold Brand unit - aged spirits and champagne, said: “Thanks to Chivas Brothers’ diverse brand portfolio and broad geographic footprint, we remain strongly positioned to deliver sustainable growth and meet consumer trends in the current business environment of contrasting market conditions.

“Looking forward, we welcome the recent news of the China tariff on Scotch being halved to 5 per cent and efforts to bring the UK-India free trade agreement into force and remain confident in the outlook for Scotch whisky and its enduring global appeal.”

The Chivas breakout came as parent group Pernod Ricard reported declining sales across all five of its priority markets in the first half. Group profits cooled as foreign exchange fluctuations and cost inflation compounded turmoil in its US and Chinese businesses.

The overall first-half performance was broadly in line with expectations, and pointed to an improvement in the second quarter.

Pernod also reaffirmed guidance for sales growth of between 3 per cent and 6 per cent between 2027 and 2029 despite the challenging industry-wide backdrop.

Chairman and chief executive Alexandre Ricard said: “Our priorities are clear: to strengthen the desirability of our brands as a foundation of long-term, sustainable growth; to drive greater efficiency across the organization; and to enhance cash generation.

“Our balanced geographical footprint, diversified portfolio and highly engaged teams put us in a unique position to navigate a contrasted environment and seize opportunities. We remain fully committed to adapting with agility and executing with discipline to meet evolving consumer needs and capture growth.

“I remain confident in the attractive fundamentals of our industry, Pernod Ricard’s strategy and the resilience of our operating model to deliver sustainable value over time,” he added.

The big spirits companies have found it tough going since the end of the pandemic sales boom. Demand has also suffered following tariffs on cognac imports in China and on EU goods entering the key US market.

Pernod, which also owns Absolut vodka, Martell cognac and Mumm champagne, reported overall sales of about €5.25 billion (£4.6bn) for the six months to December 31 - an organic decline of 5.9 per cent.

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