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Poor sales in China blamed by Pernod for profits fall

DRINKS company Pernod Ricard has blamed a slump in Chinese sales and foreign exchange movements for a 14 per cent fall in annual profits to €1.19 billion (£946 million).

The firm, which owns Paisley-based Chivas Brothers and The Glenlivet single malt whisky, reported a 23 per cent slide in Chinese sales in the year to the end of June, following a crackdown on conspicuous consumption in the country that has hit spirits sales particularly hard.

Overall the company reported flat organic sales of €7.9bn, though this represented a seven per cent drop including the "highly unfavourable" effects of currency movements against the euro.

Chivas Regal, first made at the Strathisla Distillery in Speyside in 1786, suffered a seven per cent drop in global sales volumes to 4.6 million cases, though a price increase meant the net sales decline was pared to 4 per cent.

Sales of Ballantine's blended Scotch fell five per cent to 5.9m cases. The Glenlivet's net sales improved eight per cent to 1m cases, helped by a 2 per cent rise in volumes and a price rise.

The group, which has more than a dozen distilleries in Scotland, plans to cut 900 jobs worldwide to save costs. Pernod has also reduced its advertising budget by nine per cent in the past year.

"Despite an environment that was more difficult than anticipated, we have delivered the guidance announced in February, proof of everyone's commitment, which I would like to commend," said Pierre Pringuet, chief executive of the Paris-based group.

Absolut vodka, Pernod's best-selling brand, saw net sales fall one per cent to 11.1m cases in the year.

Sales volumes of Jacob's Creek, its most popular wine, fell six per cent.

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