Registration Document - Pernod Ricard

1 History
4
PRESENTATION OF THE PERNOD RICARD GROUP
and organisation
History and organisation
More than 30 years
of continued growth
Creation of Pernod Ricard (hereinafter
referred to as “Pernod Ricard” or “the
Group”) and first international acquisitions
Pernod Ricard was born in 1975 out of the link-up of two aniseed
drinks specialists, Pernod SA and Ricard SA, long-time competitors
on the French market. The Group, they formed was able to take
advantage of new resources to develop its Distribution Networks and
its brand portfolio ( Ricard, Pernod, Pastis 51, Suze, Dubonnet, etc.) in
France and other countries.
For its initial acquisitions, Pernod Ricard gave priority to one product,
whisky, the most consumed spirit in the world, and one country, the
United States, the world’s biggest market for the whisky sector. This
led to the acquisition by the new Group of Campbell Distillers, a Scotch
whisky producer in 1975, followed by Austin Nichols, the producer of
Wild Turkey American bourbon whiskey in 1981.
Laying the foundations
of the worldwide network
The Group continued its growth outside France with the start-up of
operations in Asia, and more importantly, the creation of an extensive
dense Distribution Network in Europe. Over a period of ten years, the
Group extended its coverage to all the countries of the 15-member
European Union, establishing a strong brand presence: Pernod in
the United Kingdom and Germany and Ricard in Spain and Belgium.
A number of local acquisitions also helped to enhance the network’s
portfolio (Ouzo Mini in Greece, Zoco liqueur in Spain, etc.).
In 1985, Pernod Ricard acquired Ramazzotti, which had been producing
Amaro Ramazzotti, a well-known bitter, since 1815. This acquisition
brought with it an extensive sales and distribution structure in Italy.
The Group took over Irish Distillers, the main Irish whiskey producer
and owner of the prestigious Jameson, Bushmills, Paddy and Powers
brands, in 1988. Jameson provided the Group with a high-potential
brand to develop. Between the acquisition in 1988 and 2009, the
brand has delivered average annual growth in sales volumes of nearly
10%, rising from 0.4 million cases to 2.7 million cases.
In 1989, the Group extended its network to Australia by purchasing
Orlando Wines, Australia’s No. 2 wine producer. The company went on
to form the Orlando Wyndham group with Wyndham Estate, in 1990.
Jacob’s Creek has now become the most exported Australian wine
brand, and a market leader in the United Kingdom, New Zealand,
Ireland, Scandinavia and Asia.
Pernod Ricard and the Cuban company Cuba Ron created Havana Club
International in 1993. This joint venture markets and sells Havana
Club rum, which has since been one of the fastest growing brands of
spirits in the world.
PERNOD RICARD
Consolidation and organisation
In 1997, the Group added to its white spirits portfolio through the
acquisition of Larios gin, the No. 1 gin in Continental Europe. The
company producing Larios at the time merged with Pernod Ricard’s
local distributor, PRACSA, which had been well-established in the
country since 1978. Pernod Ricard thereby acquired a prominent
position in Spain, one of the world’s biggest markets, allowing it to
distribute both its international products and local brands such as
Palacio de la Vega wines and Zoco Pacharan.
Following all these acquisitions, the Group embarked on a
reorganisation, aimed primarily at decentralising its activities. First
of all, Pernod Ricard implemented regionalisation by giving each of
its 4 direct subsidiaries responsibility for one continent. The Group’s
structure was then reorganised around Distribution Subsidiaries
(with their own sales teams in local markets) and “Brand Owners”
subsidiaries, (charged with overseeing production and global brand
strategy). These Brand Owners only distribute via the Group’s
subsidiaries and do not generally have their own sales force. In this
way, Pernod Ricard was able to ensure global coherence of its brands,
while adapting its strategy to local market specificities.
The Group acquired Viuda de Romero tequila in Mexico at the end
of 1999.
Over the period from 1999 to 2001, the Group consolidated its
positions in Eastern Europe through the acquisition of Yerevan Brandy
Company (the Ararat brand of Armenian brandies), Wyborowa (Polish
vodka) and Jan Becher (Czech bitter). With Ararat to boost the Tamada
and Old Tbilisi Georgian wines, the Group was able to build a position
in Russia where most of this brand’s sales are made, while providing
Wyborowa with a platform for international development.
Refocusing the business strategy
At the dawn of the new century, the Group doubled its size in the
Wines & Spirits segment via the joint purchase with Diageo of
Seagram’s Wines and Spirits business. Pernod Ricard acquired 39.1% of
these business activities for an investment of $3.15 billion. This made
the Group one of the top three global Wines & Spirits operators and
consolidated its position in the Americas and Asia, while remaining
the leader in Europe. 2002 also saw the successful integration of
3,500 Seagram employees.
This helped the Group to hold key positions with regard to highquality
whisky brands, such as Chivas Regal and The Glenlivet, a high
quality cognac brand with Martell and, in the white spirits segment,
Seagram’s Gin. It also had leading local brands such as Montilla in
Brazil or Royal Stag in India.
As a result of this major acquisition, the Group decided to refocus
on its core business, and started to withdraw from the non-alcoholic
beverage segment: between 2001 and 2002, the Group sold Orangina,
which it had purchased in 1984, SIAS-MPA, the world leader in fruit
preparations for yoghurts and dairy-based desserts, as well as BWG, a
wholesaler in Ireland and the United Kingdom, and CSR-Pampryl.
I REFERENCE DOCUMENT 2008/2009 I