DRINKS giant Pernod Ricard has reported another big drop in sales of Scotch whisky in China but said it remains confident of the future potential of the market.

The French group, which owns Paisley-based Chivas Brothers, said Scotch sales remained in double-digit decline in percentage terms in China in the third quarter without giving details. In an update on trading in the first nine months the group described China as “still difficult”.

In February Pernod Ricard reported a double digit percentage decline in first half sales of Scotch in China. It highlighted then the impact of the macro-economic slowdown and anti-extravagance campaign in China on sales of Scotch in the country.

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Yesterday’s comments suggest there has been no improvement in conditions. They will be regarded with dismay by Scotland’s whisky industry, which has identified China as a key growth market.

Hopes that the emergence of a new class of affluent consumers in China would lead to rapid growth in demand for whisky have been dampened by the experience of giants such as Pernod Ricard. Some have invested heavily in trying to grow sales in the country.

In January Diageo, which makes Johnnie Walker, said its Scotch sales had fallen 42 per cent in China in the six months to 31 December.

However Pernod Ricard’s chief executive, Alexandre Ricard, said yesterday: “We are working actively to develop the new phase of growth in China, where we remain confident in the medium-term potential despite the tough current context.”

The group noted it recorded a double digit percentage increase in sales of Ballantine’s Finest Scotch in China in the nine months to 31 March. In February Pernod Ricard said growth in sales of the whisky reflected the emerging middle class opportunity in China.

Pernod Ricard said sales of Martell cognac had been resilient in China.

It did not give details of Scotch sales overall. but the whisky business appears to have made progress in some areas in the nine months to March.

Buoyant sales in India reflected strong growth for Pernod Ricard's Top 14 brands and for local whiskies. The Top 14 includes The Glenlivet malt, Royal Salute and Chivas Regal blended Scotches, Martell and Absolut Vodka.

Aberlour malt achieved good growth in the first nine months.

Sales of The Glenlivet increased 11 per cent in the USA, outperforming the whisky market there.

A strong performance in Spain was led by gins such as Beefeater and the return to growth of Scotch brands.

Excellent Scotch sales helped power 16 per cent growth in Africa and the Middle East.

The company grew sales to €1.855 billion (£1.5) in the three months to 31 March, up 1 percent year-on-year on a like-for-like basis, against 4 percent in the second quarter.

Sales rose 3 per cent in the first nine months, to €6.8bn.

The group held its forecast for full year underlying operating profit growth of between 1 percent and 3 percent .

Sales increased by six per cent annually in the Americas in the first nine months, by one per cent in Europe and by two per cent in Asia and the rest of the world.