November 28, 2019 / 5:39 PM / 8 days ago

UPDATE 1-France's Pernod Ricard targets trendy tequila for growth

(Releads with CEO comments on tequila)

By Dominique Vidalon

PARIS, Nov 28 (Reuters) - Pernod Ricard is looking to expand its tequila range, possibly through acquisition, the French drinks group’s CEO for Europe, the Middle East, Africa and Latin America said.

Gilles Bogaert told investors during a presentation on Thursday that tequila was a key spirits category for the group, which has been targeted by activist investor Elliott.

“We do not discount adding new brands to the (tequila) portfolio. We want to reinforce the weight of the tequila business in Pernod Ricard’s portfolio,” Bogaert said.

Pernod Ricard’s portfolio of tequila, which is made from the blue agave plant, ranges from ultra-premium Avion, premium Altos, standard Plus Olmeca to a majority stake in Mexico’s Del Maguey Single Village Mezcal.

Mexico and the United States are tequila’s top two markets.

The EMEA-LATAM business, which generates 28% of group sales, was “well positioned to keep delivering” with good top-line growth and margin improvement, Pernod Ricard said in slides released ahead of the call with investors.

The business achieved sales growth of 6% in the first quarter of the 2019/20 financial year, driven by a rebound in Western Europe, strong growth in Russia and demand for whisky brands in emerging markets.

Pernod Ricard posted a 1.3% rise in first-quarter underlying group sales amid weakness in duty free purchases. (Reporting by Dominique Vidalon and Sudip Kar-Gupta; editing by Jason Neely and Alexander Smith)

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