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Not a nice drop: Jacob's Creek sales fall 6 per cent


Paris-based drinks giant Pernod Ricard will push ahead with the transition of its Australian brand Jacob's Creek into a premium wine as an austerity drive in China and sceptical drinkers in the US and Britain triggered a 6 per cent fall in sales for the label.

Pernod Ricard, the world's second-biggest drinks company, said the repositioning of Jacob's Creek had been completed in almost all markets, with its new premium ranges outstripping growth from the rest of the wine brand portfolio.
The beverage group, whose other brands include Mumm champagne, Absolut Vodka, Martell Cognac and Chivas Regal, has reported its fiscal 2014 results, which showed that sales and volumes for Jacob's Creek fell 6 per cent for the year.
Jean-Christophe Coutures, chairman and chief executive of Pernod Ricard Winemakers, said the division did make a positive contribution to the parent company, although at a lower level of 4 per cent growth against high single-digit growth in previous years.
Mr Coutures said the result of the wine business was largely driven by outstanding performances from New Zealand's Brancott Estate, with net sales up 9 per cent, and Spanish winery Campo Viejo growing sales by 10 per cent. But Jacob's Creek was a drain, hurt by the austerity drive in China, where it is the nation's second-biggest imported wine brand, and tough trading conditions in North America and Britain.
"Jacobs Creek declined due to the performance in China, and the classic ranges in the UK and the US," Mr Coutures said.
It is not the only winemaker to feel the pinch of the crackdown on banquets and punctured parties by the central Beijing government, with Treasury Wine Estates booking a 12.5 per cent fall in pre-tax earnings for its Asian business on the back of souring sales in China.
Mr Coutures said Jacob's Creek's premium offering was gaining traction with drinkers.
"However, the overall repositioning of the brand to premium (through price increases and mix development) has been completed in almost all markets, with the premium ranges up 7 per cent in volume."
In Australia Pernod Ricard has upped its bet on the premium end of the wine market by recently releasing its Jacob's Creek Double Barrel brand – a range of premium reds finished in whiskey barrels.

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