China could become Pernod Ricard ’s second largest market in 2011

China now accounts for 9% of Pernod Ricard’s total sales, Pierre Pringuet, the chief executive, said in Paris yesterday. He also predicted that it could become the French group’s second largest market “very soon, possibly this year.”

He said “there is fantastic vitality” in China, where Pernod Ricard now has more than 2,000 people working for it full-time, either as direct employees or through agents and contractors.

Pringuet said that in China Pernod Ricard had “strengthened its leadership in the Scotch whisky market,“ where it now holds more than a 50% share, and that Martell Cognac had enjoyed a 30% rise in sales compared with the same period in 2009. “We don’t sell standard brands in China, only super-premiums”, he added.

The Asia/Rest of the World region achieved 23% organic sales growth in the six months to the end of December. That was the prime driver of a strong rise in profits in the first half of the financial year, although all geographic regions, including Western Europe, made gains. Sales in the UK were growing after difficult recent years, the company said.

Pernod Ricard’s net profits grew by 10%. Its 7% organic sales growth was fuelled by a 13% gain in revenues from its top 14 brands, which now account for almost 60% of its sales. That their volumes grew by a more modest 8% shows that the continued heavy promotional investment behind them is paying dividends in increasing margins; gross margins now top 60% of sales. The weak euro also aided profitability.