WHISKY MARKET: Premium brands face sobering sales

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WHISKY MARKET: Premium brands face sobering sales figures

Published on March 28, 2005

 

Growth expected to be only 2% this year, after a big sales drop in 2004

 

The premium Scotch whisky market will grow by only 2 per cent this year after dropping 21 per cent to Bt3.5 billion last year, a major player said last week.

 

Panuwat Wongsriphisan, managing director of Pernod Ricard (Thailand) Ltd, said business would not be good.

 

But he said at least the results would reflect genuine demand from people who enjoyed drinking.

 

Pernod Ricard manufactures premium spirits, including Chivas Regal, 100 Pipers and Master Blend.

 

Last year?s slump was caused by the government implementing restrictive regulations towards all kinds of alcoholic drinks.

 

These regulations including limits on advertising and tax hikes aimed at reducing the number of drinkers.

 

Demand was also skewed by marketing campaigns and a price war.

 

During the price war, some premium brands sold at only Bt680 per litre, while the real cost was Bt990.

 

The strategy was aimed at drawing more new customers, otherwise they would turn their eyes to cheaper brands.

 

The topsy-turvy market taught the whisky business more about the consumption of premium spirits.

 

The government might release more restrictive regulations, Panuwat said.

 

No liquor company can avoid this, so they all should accept the situation and try to adjust in terms of marketing and products, Panuwat added.

 

Chivas Regal bucked the market trend last year, with sales rising 15 per cent.

 

The company has earmarked Bt150 million for marketing, of which 90 per cent is to go to below-the-line activities.

 

Last month, Pernod Ricard launched ?This is the Chivas life? campaign.

 

It has contacted 20 top-end bars in Bangkok to invite internationally recognised DJs to play trendy music at the venues.

 

It also arranged three Chivas exclusive parties with a Bt10-million budget for each one, and invited 1,000 guests.

 

Pernod Ricard expects the marketing plan will help Chivas expand its target group to young adults.

 

The campaign will continue until August.

 

Pernod Ricard expects to add 3 to 4 percentage points to the 30-per-cent market share for Chivas.

 

The company?s revenues last year grew 30 per cent with 100 Pipers accounting for 60 per cent of sales. The rest came from Master Blend with 31 per cent and Chivas with 9 per cent. Worldwide, net sales of Pernod Ricard?s wine and spirits grew 5.8 per cent to ?3.49 billion (Bt177 billion) last year.

 

The Paris head office said Asia enjoyed an excellent year, with fast growth of local brands in India and Thailand.

 

Nitida Asawanipont

 

The Nation

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