February 14, 2017 / 2:24 PM / 8 months ago

Pernod Ricard CEO warns a U.S. border tax would hit consumer

LONDON, Feb 14 (Reuters) - Pernod Ricard would have to pass a proposed U.S. tax on imported goods onto consumers, the chief executive of the French spirits group said on Tuesday.

“Retailers are saying, and we’re fully in line with them, that the border adjustment tax is a consumer tax, a consumption tax,” Alexandre Ricard told reporters in London.

Ricard’s comments come the same week that the chief executives of some of America’s largest retailers, including Target Corp and Best Buy Co Inc head to Washington to try to kill the tax.

“I don’t think it’s fair to the American consumer,” Ricard said of the proposal by Republican lawmakers to impose a 20 percent tax on imports.

The U.S. arm of the maker of Absolut vodka, Martell cognac and Mumm champagne has joined “Americans for Affordable Products”, a group of over 100 businesses opposed to the tax.

The lobby group, launched earlier this month, includes other distillers Diageo North America and LVMH, as well as retailers including Walmart, Nike and Walgreens Boots Alliance, according to its website.

Pernod’s business relies largely on provenance-based drinks whose production can not be moved, such as cognac and champagne, which must both be made in France.

But for some products, like blended Scotch, there is flexibility. For example, Ricard said it was possible to blend Scotch in Scotland and ship it to the United States in bulk in inert containers to be bottled locally.

He said such a move could be more efficient regardless of any border tax, since shipping whisky in bulk is lighter than shipping it in bottles.

“Maybe, it’s something one could consider despite all of that,” Ricard told Reuters. “I would say it’s something we should do anyway for environmental reasons.” (Editing by Alexander Smith)

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