Pernod Ricard plans to close Russian rep office - Kommersant
MOSCOW. Aug 18 (Interfax) - France's Pernod Ricard, which owns the brands Chivas Regal, Jameson, Ballantine`s and Ararat, is preparing to close its representative office in Russia. Laurent Pilet, General Director of P.R. Rus since 2019, has moved to another region, and Ignaty Arakelyan, who led the company's Yerevan Brandy Company, will oversee the termination of the business, Kommersant said.
Pernod Ricard told the publication that the former head of the Russian office moved to a new position in another region. Arakelyan clarified that P.R. Rus is going through the procedures required to cease operations and that the company has no other plans.
Almost the entire P.R. Rus team has already left, and the remaining employees may leave before the end of August, a Kommersant source in the market said.
The company imported approximately 14 million liters of strong liquor into Russia in 2020-2021, not including Ararat, market sources said. In 2022, after the outbreak of hostilities in Ukraine and the tightening of Western sanctions, it reduced imports to 6.95 million liters. In May 2023, the company announced the end of shipments of all international brands to Russia. From January-April, the company imported 4.6 million liters of alcohol, Kommersant said.
Ararat cognac produced at the Yerevan Brandy Company continues to be shipped to Russia, a representative of Pernod Ricard said. In 2021, Luding Group became the distributor of this brand in regional and local chains, wholesale, and for corporate and private buyers. Today, the distribution contract is valid, and cooperation in regard to the brand is going on as usual, Luding Group executive director Ernest Khachaturyan told Kommersant.
A source in a large alcohol company notes that 70%-90% of Ararat cognac is consumed in Russia, and there are no other markets for the drink with similar consumption volumes. Kommersant's source heard that Pernod Ricard could give all of the product's distribution to Luding Group up to and including the sale of the Yerevan Brandy Company itself, but no agreements have been reached so far. Another source on the market is also aware of the possible sale of Ararat's production facility. Luding Group is interested, but the sale price is too high.
Pernod Ricard denies it is selling Ararat.
According to the reports of P.R. Rus JSC, in 2022 the company's revenue decreased to 19.2 billion rubles from 27.5 billion rubles in 2021, while net profit dropped to 2 billion from 2.2 billion rubles.