Pernod Ricard Restructures Operations to Streamline Business

Pernod Ricard is restructuring to streamline operations, focusing on its premium and prestige spirits and wines. The company will reorganize its business into three main areas: spirits and champagnes, local strategic brands, and specialty brand craft spirits. It will also divest non-core assets and cut costs, with 300 jobs at risk. The restructuring aims to improve efficiency and competitiveness in the global market.

French spirits and wine giant Pernod Ricard has announced a significant restructuring plan to streamline its operations and improve efficiency in the face of declining sales. The company aims to reorganize its business into three main areas: spirits and champagnes, local strategic brands, and specialty brand craft spirits. Additionally, Pernod Ricard will divest non-core assets and cut costs, with 300 jobs at risk.

The restructuring, dubbed "Tomorrow 2," is part of the company's effort to create a more agile and simplified organization. According to internal presentation slides seen by Reuters on Wednesday, the company will group its brands into two main divisions, named Gold and Crystal. The Gold division will include champagne and brands such as Martell cognac and Irish whiskey Jameson, while the Crystal division will include Havana Club, Absolut vodka, and some French aperitif brands [1].

Pernod Ricard's Chief Executive Alexandre Ricard stated in a staff memo that the restructuring will lead to "departures." The company plans to implement these changes, including voluntary departures, in the last three months of 2025. The restructuring will also involve bundling administrative tasks rather than having brands operate individually [1].

The move comes as European spirits makers grapple with a downturn in sales. Drinkers in key markets such as China and the United States have reduced spending due to inflation or other economic worries, while international trade tariffs have also hurt sales. Pernod Ricard reported a 3% decline in third-quarter sales in April, and its shares have lost about 50% since the start of 2023 as sliding sales and tariffs have weighed on investor sentiment [1].

Pernod Ricard's restructuring plan is part of a broader trend in the spirits industry. Rivals such as LVMH, Diageo, and Remy Cointreau have also had to adjust their growth expectations and cut jobs in response to the changing market environment [1].

References:
[1] https://finance.yahoo.com/news/pernod-ricard-launches-restructuring-plan-173923576.html
[2] https://finance.yahoo.com/news/pernod-ricard-plans-reorganization-two-180821196.html
[3] https://economictimes.indiatimes.com/industry/cons-products/liquor/pernod-ricard-launches-restructuring-plan-as-spirits-sales-slide/articleshow/121937577.cms?from=mdr