Pernod Ricard restructures

Pernod Ricard restructures French business as sales fall

October 3, 2019
By Alana House

Pernod Ricard has announced that its separate Ricard and Pernod companies will merge in France, leading to 280 redundancies.

It said the current French model, with two distribution networks, had become “overly complex and lacks agility”.

“This requires a structural response and therefore the total reshaping of the organisation of the two French distribution subsidiaries, Ricard and Pernod,” the company noted.

“This involves implementing a structure that will allow the Group to be the first to seize all growth opportunities across all distribution channels. It is within this context that the companies Ricard and Pernod have proposed to their Employee Representative Bodies the creation of a single company, Pernod Ricard France, with effect from 1 July 2020. The head office of this new entity would be located in Marseille, in the new Docks business district.”

It echoes the restructuring of key markets that has already been implemented in the United States, China and Global Travel Retail.

In two years, Group sales in France have declined €60 million. Pernod Ricard said this was the result of “deflationary pressures”, the impact of the Egalim Law – which has seen enhanced food and drink regulation in France – as well as an emerging group of consumers who are “reinventing the meaning of convivialité”.

The restructure will be based around three major pillars: consumers, customers and employees.

1)    Winning back consumers thanks to a unified and optimised portfolio and a bold innovation plan
2)    Reinventing its business model to better serve our customers thanks to a single network structured by distribution channel
3)    Bringing together its employees within a single, more streamlined and more agile organisation

Pernod Ricard said the proposed merger of the two companies would lead to approximately 280 roles being open to voluntary redundancy. These would involve the sales and marketing departments affected by the new business combination.

“This organisation would also create new career development opportunities for employees with the planned creation of around 90 new roles to support this new strategy,” it added.

Sparkling wine brand to be sold

The Group also announced the proposed disposal of the brand Café de Paris and the Cubzac production site to InVivo Wine, the wine division of the leading French agricultural cooperative.

Cafe de Paris, Pernod Ricard restructure

This project would be completed with a guarantee to safeguard the jobs of the site’s 29 employees. The two parties are in talks to establish a sub-contracting agreement for the brands not sold to InVivo.

Philippe Coutin, Chairman of both Ricard and Pernod said: “This project will be the product of several months of teamwork. We are entering into a phase of collaboration with management and unions – we hope this phase will be as responsible and interactive as possible.

“Throughout our history, the companies Ricard and Pernod have managed to evolve and reinvent themselves to continue the entrepreneurial adventure embarked upon by our founders. We have always succeeded together and together we will rise to this challenge.”

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