Drinks Giants: Diageo, Pernod, AB InBev, Heineken — 2026-10-17

Pernod Ricard reported a 6% decline in first-quarter sales, driven by significant weakness in the US and China, though growth in India helped soften the blow. Meanwhile, industry lobbyists are intensifying pressure on the US administration to remove remaining tariffs on European spirits, specifically targeting cognac and liqueurs.

Pernod Sales Slide; Lobby Pushes for Cognac Tariff Relief

Top developments

Pernod Ricard Q1 Sales Drop 6%, Maintains Cautious Outlook

Pernod Ricard announced on October 15, 2026, that its net sales for the first quarter of fiscal 2027 totaled €2.234 billion, representing a 6% decline compared to the previous year. The drop was primarily attributed to weak performance in its two largest markets, the United States and China, where sales fell by 10% and 25% respectively. Despite the broader decline, the company noted a 19% growth in India, which helped cushion the overall impact, and reaffirmed its full-year guidance.

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drinks-intel.com

drinks-intel.com

Spirits Lobby Urges Trump to Drop 10% Tariff on Cognac

The Distilled Spirits Council of the United States (DISCUS) has formally requested that the Trump administration remove the remaining 10% tariff on European cognac and liqueurs. This move follows successful negotiations that secured tariff relief for Scotch and Irish whiskey, with the lobby arguing that the current levies are raising costs for importers, bars, and retailers without providing corresponding benefits to the US industry. The outcome of this request could significantly impact the profitability of major spirits brands operating in the US market.

Pernod Ricard Sees "Sequential Improvement" Despite Contrasted Environment

In its press release, Pernod Ricard characterized its Q1 performance as showing "sequential improvement" despite a difficult global environment. The company highlighted that while organic sales declined by 0.9%, volumes actually increased by 6%, suggesting that the revenue hit was largely due to pricing and mix effects rather than pure volume loss. This nuance was welcomed by the market, with Pernod Ricard shares rebounding as investors focused on the volume growth and potential future IPO of its Indian operations.

Local view

French media outlets have focused heavily on the divergence between Pernod Ricard's strong performance in India and its struggles in Western markets. Le Monde published an analysis suggesting the "party is over" for the spirits industry, citing generational shifts in consumption habits among Gen Z as a structural headwind. Meanwhile, BFM Bourse noted that Pernod Ricard's stock benefited from a positive spillover effect following LVMH's quarterly results, which showed resilience in the luxury goods sector that often correlates with premium spirits demand.

Context & numbers

• Pernod Ricard Q1 FY27 Net Sales: €2.234 billion (-6% reported, -0.9% organic).
• Regional Performance: US sales down 10%; China sales down 25%; India sales up 19%.
• Volume vs. Value: Pernod Ricard reported a 6% increase in volumes, contrasting with the 0.9% organic sales decline, indicating negative price/mix effects.
• Tariff Status: A 10% tariff remains on European cognac and liqueurs entering the US, while Scotch and Irish whiskey have recently received relief.

On the radar

• US Tariff Decision: Watch for any official response from the Trump administration regarding DISCUS's request to lift the 10% cognac tariff.
• Pernod Ricard India IPO: Speculation continues regarding a potential listing of Pernod Ricard's Indian operations, which is seen as a key value unlock for the group.
• Heineken Q3 Results: Investors are awaiting Heineken's next quarterly update, with analysts expecting mixed volume performance across key markets like Vietnam and India.