Pernod Ricard weighs possible sale of GH Mumm

Pernod Ricard, the world’s second-biggest premium drinks group, is seeking offers for GH Mumm as it moves to restructure its portfolio and concentrate on higher-margin spirits, generating a more profitable return on capital employed. The post Pernod Ricard weighs possible sale of GH Mumm appeared first on The Drinks Business.

Feb 10, 2025 - 11:13

Pernod Ricard weighs possible sale of GH Mumm

Pernod Ricard has declined to confirm or deny that it is exploring a sale of its champagne brand GH Mumm.

According to Reuters, the world’s second-biggest premium drinks group is seeking offers for Mumm as it moves to restructure its portfolio and concentrate on higher-margin spirits, generating a more profitable return on capital employed. "Pernod Ricard regularly assesses and evaluates its strategic opportunities and is continuously exploring options, including divestments or the streamlining" of businesses, the French company said in a statement. "This is a usual process in line with management’s mission of delivering value to shareholders, employees, clients and stakeholders." The group said that no decision about any particular action had been taken. Mumm is one of the most widely known Champagne brands and owns 260 acres of grand and premier cru vineyards in the region. Its Pinot Noir holdings would be attractive to competitor houses. Mumm was founded in 1827 and launched Mumm Napa in 1979 to make sparkling wines in California. It is known for its "Only the Best" branding and its iconic Cordon Rouge red ribbon label. Pernod acquired Mumm in 2005 as part of the joint takeover of Allied Lyons in partnership with Diageo.

The price tag

According to the Reuters report, Pernod Ricard would be unlikely to consider a price of less than €200 million for Mumm, which is about three times the value of its annual sales. Champagne houses have been under pressure as demand has fallen as global consumers adjust their budgets and spending habits to meet the economic slowdown as high rates of inflation persist in Europe, America and China. As a symbol of celebration, Champagne sales fell by some 10% last year. Last year Pernod Ricard sold its Australian and New Zealand wine brands to a consortium of investors headed by Bain & Co because of the low returns they generated. Bain and its backers had already taken control of Accolade to form Australian Wine Holdco. The labels involved in that deal included Jacob’s Creek, Orlando, St Hugo, Stoneleigh and Brancott Estate as well as Spain’s Campo Viejo. Before the sale wines comprised about 4% of Pernod Ricard’s sales.

Wine portfolio

A successful disposal of Mumm would not mean Pernod Ricard exiting wine completely. It reportedly plans to retain the more prestigious Perrier Jouet Champagne brand and also owns the celebrated Provencal rose, Sainte Marguerite. That said, the French company’s reported determination to concentrate on higher margin investment would diminish its previous claims to have a drink (apart from beer) to cater for any occasion. The company is facing difficulties on several fronts. Sales of Martell Cognac were already on the slide before China imposed extra duties as part of a tariff war with the European Union. Market slowdowns President Trump is also threatening EU exports as part of a tariff war but has put a temporary halt on planned imposts to affect products from Mexico and Canada that would include Pernod Ricard’s tequila and Canadian whiskey lines. Finance director Helene de Tissot said last week that tariffs imposed by China and potentially by the United States could hit Pernod Ricard by about €200 million a year. The French company brought forward its interim results announcement last week and cut its forecasts for the year to the end of June. It now predicts a low single-digit decline in organic net sales for the full year