Austerity hurts Pernod's restaurant wine plan in China

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Pernod Ricard's drive to sell more wine through restaurants in China has suffered a setback as austerity measures hit the French wine and spirits maker hard in the country.

Pernod Ricard saw net sales in China fall by 23% in its last financial year, to the end of June. Most of the fall is due to falls in Cognac and Scotch whisky consumption, related to the Chinese government's well-publicised curbs on officials' entertainment budgets.

But, Pernod also reported a tough time for its fledgling wine business in the country.

The French firm said premium wine sales fell in China during the 12 months, with its Jacob's Creek brand particularly affected. It did not provide specific figures.

Problems were 'due mainly to the contraction of consumption in Chinese restaurants', Pernod said.

A year ago, Pernod was reported to have seen Jacob's Creek sales in China's restaurants growing in double-digit percentage points year-on-year.

There has been regular debate among wine industry professionals in recent years about the extent to which wine can become part of the dinner table culture in China.

CH'NG Poh Tiong has written extensively for DecanterChina on the subject. 'We have to make sure that what wine we pair with what food works for the vast majority of readers and consumers,' he said in his monthly column, published this week.

However, others have argued that the variety of foods and flavours simultaneously available during a traditional Chinese restaurant meal may inhibit wine and food matching.

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