China’s Crackdown on Corruption Pops Pernod’s Bubble

As China's officials sober up, the drink-maker's Asia sales take a hit

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Balint Porneczi / Bloomberg / Getty Images

A glass of Ricard pastis is poured in this arranged photograph in a bar near Archacon, France, on Tuesday, July 16, 2013.

China’s crackdown on corruption, at least the visible signs of it, has hit luxury brands hard. The latest fancy brand to get a kick in its fancy pants is Pernod Ricard, the world’s second-largest maker of spirits.

According to the Wall Street Journal, drink sales have slumped across China, and really slumped among “ultra premium” brands, which have become a little too conspicuous for officials to quaff.

As a result, the focus has shifted downmarket to China’s younger consumers. The kids in the clubs may hesitate to order a $100 bottle of cognac, but perhaps a $28 bottle of Ballantines Finest whiskey, the company’s latest offering to China, will hit the spot. If so, the party for luxury brands is just getting started, even if China’s high-flying public servants are sobering up.

[WSJ]

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