CHIVAS Brothers owner Pernod Ricard has admitted trading remains challenging for Scotch in China but said the resurgence of Martell Cognac has stabilised its position in the market.

The distiller said its performance in China was “improving and now stable” as it reported organic sales up four per cent to €7.05 billion in the first nine months of its financial year.

However it said trading had been softer in the third quarter thanks to the timing of Chinese New Year, in line with forecasts. Third quarter sales grew by three per cent to €1.99bn.

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Luxury spirits makers have in recent months reported that trading has started to gradually improve in China after coming under pressure on the back of government-led austerity measures since 2012.

Pernod described its overall position in China as flat. It said Martell Cognac had returned to “good volume and value growth” in the first nine months, building on the 10 per cent rise in half-year sales it reported in February. But it noted that conditions for Scotch were challenging, with growth in the off-trade offset by declining sales in the on-trade.

While sales across Pernod’s Asia-Rest of the World region grew a modest one per cent, organic sales were up seven per cent in the Americas, leaping five per cent on the back of double-digit percentage growth on Jameson Irish whiskey, Altos tequila and Martell. But sales of Absolut vodka fell in the US.

Meanwhile, Pernod said it had seen “dynamic growth” in the UK after concluding higher prices with some customers.