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Pernod Ricard closing sales gap with USL

The uncertainty at the country’s largest liquor manufacturer United Spirits has resulted in its arch rival Pernod Ricard closing the sales gap with it.

While Pernod, the maker of the Royal Stag and Imperial Blue whiskies, has always been considered a profitable company in India, it was small in terms of sales. That is slowly changing now.

For the fiscal ended March 2014, Pernod Ricard registered net sales of Rs 8,614.5 crore, a growth of 19.37% over the previous year. For the fiscal ended March 2013, Pernod’s net sales were Rs 7,216.4 crore. These numbers were gathered from analysts tracking the liquor industry, who’ve been following Pernod Ricard closely. The company is not listed in India.

USL’s net sales growth, in contrast, was almost flat at Rs 10,615 crore for the fiscal ended March 2014 compared to Rs 10,748 crore in the previous fiscal. These numbers are consolidated figures reported by it. USL is a listed Indian company.

On the bottomline front, Pernod’s net profit was Rs 810.3, a growth of 18.26% over the previous year. USL, on the other hand, reported a loss of Rs 4,489 crore as the company struggled with operations in a weak market. The company is now controlled by Diageo, which is attempting to clean up USL’s books, whose accounting practices have been questioned by auditors and minority shareholders.

On November 28, minority shareholders of USL rejected as many as nine resolutions out of 12 tabled at the company’s annual general meeting, embarrassing Diageo.

Among the proposals rejected include pacts of USL with entities connected to erstwhile promoter Vijay Mallya. Shareholders also rejected a loan agreement between USL and United Breweries Holdings Ltd dated July 3, 2013 and did not approve of a licensing proposal tabled by USL to manufacture and distribute Diageo’s Bottled in India (BIO) products.

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