The City Interview12 April 2012

PERNOD Ricard. The mention of the name conjures an alluring image of France. Tree-lined boulevards, cafes with tables spilling on to pavements and old men in berets hunched over chessboards and sipping anis.

But meeting Richard Burrows, joint managing director of Pernod Ricard, the drink that springs to mind is Guinness, made by rival Diageo. For Burrows is amiable, Irish and built like a rugby prop forward.

It is not the only surprising thing about 56-year-old Burrows. He is a foreigner at the top of a quintessentially French company, reporting only to Pernod Ricard's chairman and chief executive Patrick Ricard...and he doesn't even speak French.

But this is a new Pernod Ricard. Its recent purchase - with Diageo - of Seagram's wine and spirits business catapulted it into the international league. By any yardstick, Pernod Ricard is certainly in the world's top three. Net profits leapt by 84% to £230m last year. And it is Burrows - previously chief executive of Irish Distillers before it was bought by Pernod Ricard in 1988 - who is steering a very different company from the one he joined.

'The Seagram deal was a kind of watershed for Pernod Ricard,' he says. 'It doubled the size of our wines and spirits operation and moved us from being a Eurocentric company to a global one. We have a presence now in the US, Latin America and Asia, including India - all places where we were weak or non-existent before.'

Pernod's brands are going global, too. In 1975, when Pernod and Ricard merged, the goal was to sell its anise-flavoured products worldwide. That didn't happen, says Burrows, and the company turned to international drinks such as whisky. 'Ricard is our biggest brand but only really has a presence in France and its neighbours.'

The Pernod drinks cabinet contained brands such as Jameson, Bushmills and Jacob's Creek even before the Seagram deal added Chivas Regal, Seagram's Gin and Martell Cognac to the party.

A third of Pernod Ricard's business is now whisky. But Burrows rejects the notion that the company might change its name to reflect all its brands. 'Pernod Ricard is recognised by the investment community. We have no intention to change it to some meaningless word,' he says. One suspects he is thinking of Diageo, Pernod's partner in the acquisition and break-up of Seagram.

More than 3,600 Seagram staff came to Pernod and have been introduced to the French company's decentralised structure, delegating responsibility to national managers. 'It puts decision-making as close as possible to the market,' says Burrows. 'We want our managers to act like entrepreneurs.'

Pernod has snapped up more companies, including Poland's Wyborowa vodka and Czech spirit Becherovka, and sold non-core activities.

Sales of Scotch have declined steadily for 30 years, but Burrows isn't worried, arguing that premium brands such as Chivas Regal and The Glenlivet are growing at the expense of the middle market. 'It's a natural progression,' he adds. 'As economies improve, as people become more health-conscious, they tend to migrate to better quality.' But brands must keep moving. The ready-to-drink market - for instance, pre-mixed gin and tonic - is hot at present. Burrows is considering a ready-to-drink whisky mixed, but is not convinced.

'The format tends to rely on big brand names and I'm not sure that brand extensions don't damage the mother brand in the long term.' The company plans to expand brands such as Jameson and Chivas Regal and extend its New World wines. Pernod sells 50m cases of spirits compared with 20m cases of wine, but the mighty Jacob's Creek brand gives it significant market share.

'The industry will continue to consolidate,' says Burrows. 'Next year we'll actively look at acquisitions. We're happy with our brands, but that's not to say there aren't a few things we'd like. But we'll also grow the business organically.'

Burrows is nothing if not a company man. What is his favourite drink? 'I have a favourite for different times of day. Before lunch I'd be happy to have a Ricard, a vodka and tonic, or a gin and tonic. In the evening I'd have a Jameson or Chivas Regal or a Havana Club.'

All Pernod brands, of course. Just don't mention Guinness.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in