Pernod Ricard cuts sales outlook due to Chinese tariffs

Pernod Ricard has cut its sales outlook for the year, blaming China’s tariffs on brandy imports from the EU for subduing demand.

The French spirits maker, whose brands include Absolut Vodka, Beefeater gin, and Jameson whisky, said organic net sales would fall by a low-single digit percentage in 2025 after previously forecasting growth of 4% to 7%.

The company will also launch a plan to cut €1bn in costs between 2026 and 2029.

Pernod’s sales fell 6% to €6.2bn in the first half of the financial year as China and the US proved particularly challenging.

Beijing imposed tariffs on EU brandy after Brussels levied tariffs on China’s electric vehicle imports.

Sales in China fell 25% with sharp declines on Martell and Royal Salute whisky, though Absolut, Olmeca and Jameson saw good growth, the company said.

The tariffs also dragged down sales by 9% in the company’s global travel retail business, though this was offset by the rise of air travel in Europe and American cruises.

Barclays analysts said while Pernod’s attempts to quantify the next few years were helpful, many questions still remained.

“It is hard for us to see the company hitting the FY26 expectations if China cognac tariffs are not removed or reduced later this year, and there could be a further impact if the US implements tariffs,” they said.

In the first half of the year, US sales were down 7%, though this was now improving, Pernod said.

European sales fell 2%, with Germany in sharp decline due to consumer spending pressures. Poland, France and Ireland are proving more resilient. Absolut is performing well on the continent, with Pernod citing a “halo effect” from ready-to-drink cans.