Pernod abandons wine brands such as Jacob’s Creek and Campo Viejo and bets on spirits

Pernod Ricard is to abandon wine brands including Jacob’s Creek to focus on spirits.

The drinks giant will sell parts of its wine portfolio to the owners of Australia’s Accolade Wines, ditching names such as Stoneleigh and Campo Viejo, and other wines made in Australia, New Zealand and Spain.

It will maintain its American wines and some brands from France, Argentina and China.

He did not disclose the value of the deal, but said the portfolio sold produces more than 10 million cases each year.

It is now turning its attention to spirits, including Jameson and Absolut Vodka, as well as its Champagne houses such as Mumm.

In April, the Paris-based group said wine sales fell 9 percent year-on-year, driven by declining demand in the United States and the United Kingdom.

Last year it recorded sales of more than £10bn and profits of £2.8bn, of which wine accounted for just 4 per cent.

Pernod said wine brands would “benefit from the focus needed to realise their potential, strengthen their position and take advantage of new opportunities.”

The company, valued at around £27bn, is run by Alexandre Ricard, grandson of founder Paul Ricard.

Accolade, owned by a consortium including US private equity giant Bain Capital, said the business combination meant it could “better address the structural challenges facing the industry”.

Wine producers are facing the threat of climate change, which makes each harvest less secure, and are grappling with rising production costs and labor shortages.

Pernod shares rose 3.3 percent but are down 37 percent in a year.