French drinks giant Pernod Ricard is planning to raise prices for its drinks due to inflation pressure and stablized demand for spirits in its top markets in the US and China.
The price hike is expected to be introduced in the second half of its fiscal year, following earlier price increase of 10% for its global prices in the second half of 2022, according to a report by Bloomberg.
The company which owns popular brands like Jameson, Chivas Regal and Absolut reported strong spirits growths in the first half of FY23, with all spirits categories reporting double digit growths. The group’s sales for H1 FY23 reached €7.11 billion, up by12% organically.
But with inflation, going into H2 of FY23, the group CEO said he expects the maker of Absolut vodka and Chivas Regal to have raised prices by a “high single digit” percentage for the full year to counter inflation as sales in its most important markets return to normal following Covid-19 pandemic disruptions.
The price hike as the company believes will not deter consumers from premium products. Previous round of price increase despite inflation and weaker economy, US demand for its premium spirits remains high.
The confidence for the second half of the FY23 is also lifted by China’s re-opening. The group expects the Chinese market to bounce back in 2023. Despite lockdowns, sales in the Chinese market grew by 4% in H1, according to the company.