Pernod Ricard lowers full-year outlook amid 25% sales decline in China, tariff uncertainty

FRANCE – French spirits company Pernod Ricard has scaled back its full-year outlook following 25% sales drop in China during the first half of its 2025 financial year.  

The company now anticipates a low-single-digit decline in organic sales for the year, revising its previous forecast of a return to growth. 

The maker of Jameson Irish whiskey attributed the decline to weak consumer demand, a challenging macroeconomic environment, and sharp declines in its Martell Cognac and Royal Salute Scotch whisky brands in China.  

Martell sales plunged 25 percent in the first half (H1), contributing to approximately 90 percent of the group’s total net sales decline. Royal Salute also recorded a 20 percent decline. 

Overall, Pernod Ricard’s organic net sales for H1 fell by 4 percent to €6.176 billion, with a 6 percent drop on a reported basis.  

The company also warned that trade tariffs imposed by China and the United States could result in an estimated €200 million (US$207 million) annual hit to its business. 

By region, the Americas recorded a 4 percent decline in sales during H1, including a 7 percent drop in the U.S. While Canada and Brazil experienced growth, sales in Mexico declined.  

In Asia and the rest-of-the-world region, sales fell by 5 percent, driven by the sharp downturn in China.  

However, India recorded a 6 percent sales increase, supported by strong growth for Jameson, The Glenlivet, Ballantine’s, Royal Salute, and Royal Stag. 

Sales in Europe declined by 2 percent, though when excluding Russia, the region posted a 1 percent increase. Poland, France, and Ireland were highlighted as key growth markets. 

Pernod Ricard’s global travel retail segment faced significant challenges, particularly in China, where anti-dumping measures introduced in 2024 led to the suspension of duty-free sales of Cognac.  

The company expects these factors to “heavily impact” its performance in the second half of the financial year. 

In its full-year 2025 outlook and medium-term update, Pernod Ricard stated that “conditional on the challenges posed by the global tariff environment, FY26 is expected to be a transition year with improving trends in organic net sales.”  

The company also revised its long-term growth projections, now forecasting sales growth of 3 – 6% between 2027 and 2029, down from the previous 4 – 7% target, citing “extraordinary trade tensions.” 

Uncertainty over U.S. tariffs remains a key concern for the spirits industry. U.S. President Donald Trump’s tariff threats on Mexico and Canada, which could affect Canadian whisky, tequila, and mezcal, have prompted companies to reassess their market strategies.  

Earlier this week, Diageo also withdrew its full-year forecast due to similar concerns over trade policy and weak demand in certain regions. 

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