Pernod Rupert

Fascinating profile of Pierre Pringuet in the Independent today.  This interview with the boss of the world’s #2 liquor company Pernod Ricard, is sure to be required reading at Aan-de-Wagenweg in Stellenbosch.  For if this is not an invitation to Distell to elope, then nothing is.

pp 255x300 Pernod Rupert

A new boss for Distell?

For Pierre is desperate to overtake Diageo and the Indy makes the point “Pernod is set to grow and Africa is in its sights.  Emerging markets are where the growth is.”  An observation confirmed by Distell’s recent results.  With Brandhouse – Diageo in drag – breathing Johnnie Walker whisky fumes down Distell’s neck, Pernod Ricard must be an attractive suitor for Distell CEO Jan Scannell.  Meanwhile Chinese investors are accumulating brands like Giorgio Dalla Cia collects mushrooms in the Jonkershoek forest which puts pressure on Pernod to do something.

Since Remgro is the largest shareholder in Distell, Johann Rupert would obviously be a kingmaker in any deal.  The focus of Pernod Ricard on the luxury end of the drinks market must resonate with his Richemont state of mind.  “Pernod’s brands aren’t the guzzled-down shots in cheap bars.  They are predominantly at the ‘luxury’ end of the drinks spectrum.”  To sell his stake in Distell to Pernod Ricard for a piece of the international company must appeal.  He already has a deal with the (French) Rothschilds and a European deal would suit better than a tie-up with British Distell.  Heck, his own personal wine interests are focused in Franschhoek.

As the Indy continues “However, Africa could be there for the taking.  Diageo has stolen a march with its lager brands and Guinness, which are sold in sub-Saharan Africa, where beer is drunk more than spirits.  And it has begun to sell its spirits via its beer channels.  Pernod doesn’t have a beer brand to compete.”  But SABMiller, a major shareholder in Distell, does.

Marc Hasenfuss focused on KWV in his analysis of the liquor industry in the Financial Mail last week.  But to my mind, KWV and their Irma Stern paintings are a red herring.  The cherry on the top of a sale of Distell to Pernod is the position Pierre has adopted vis à vis alcohol abuse, likely to become the major issue for liquor companies going forward.  The almost prohibitionist position of the SA minister of health is a sign of things to come.  As Pierre says “We are not in favour of binge drinking or the abuse of alcohol.  We believe in moderate consumption.”