01. Strengthening our leadership in China
Hit hard by the Covid-19 crisis, the Chinese sales shrank in the second half of the year. Yet China remains a highly promising market for Pernod Ricard - the leader in international spirits there. A major project, the building of a distillery for the domestic production of Chinese malt whisky is proof of the Group's long-term strategy to consolidate its leadership.
China: a buoyant market
Pernod Ricard has been active for 24 years in China, where 9% of its business was generated in FY20. It’s a country that is “unique and fascinating” for Jean‑Etienne Gourgues, CEO of Pernod Ricard China: “It has one of the oldest traditions of spirits distillation in the world, dating back 5,000 years. There is a keen appetite for spirits, both local and international brands.” And in a country of 1.4 billion people, the opportunities to develop are vast. China is a promising region for growth and one of Pernod Ricard’s investment priorities, focusing in particular on emerging middle and affluent classes and changing Chinese consumer tastes.
The first ‘made in China’ single malt whisky
The Group decided to invest 140 million euros over the next 10 years in Emeishan (Sichuan), becoming the first international company to build a single malt distillery in mainland China. “ We are going to produce and market an iconic malt whisky for whisky lovers in China and around the world,” continues Jean-Etienne Gourgues. “This project is part of our ‘Transform & Accelerate’ plan and will allow us to strengthen our leadership in the whisky category in China with a very comprehensive offer.” The project broke ground in August 2019: production will begin in 2021 and commercialisation in 2023.
Developing distribution networks in Southeast Asia
Although whisky and cognac have a substantial presence, local spirits like Baijiu dominate the Chinese market. In November 2019, Pernod Ricard began a strategic partnership with Wuliangye, the country’s second largest producer, combining
resources for the distribution of this emblematic white spirit.
“We are going to jointly develop our regional distribution networks in Southeast Asia, the rest of the continent and even beyond,” comments Ludovic Ledru, Vice‑President Finance, IT and Strategy of Pernod Ricard Asia. Representing 80% of
alcohol consumption in China, but little known in the rest of the world, Baijiu is also widely enjoyed by the Chinese expatriate community.