A conversation about trade, sustainability and informed choices with Alexandre Ricard, Pernod Ricard

I'm very well, thank you very much and I'm delighted to be here today with you.

Listen, I think the EU has a big role to play. As an organization, Pernod Ricard, we've always in our history been supportive of the EU and its vision of free trade around the world. Our business, by the way, is an origins-based business. So we produce whiskey in Ireland. We produce whiskey in Scotland, by the way. We produce whiskey in the United States. We produce Cognac in France and gin in a number of countries of origin to sell and market these products around the world to address people's desires and needs and so on and so forth. And this business can only flourish and create value for all the stakeholders including consumers through free trade. We are celebrating this year our 50th anniversary, where two companies, Pernod and Ricard, merged together with that vision in mind to have a global free trade business within the wine and spirits industry. And by the way, we're celebrating at the same time this year our 30th anniversary here in Brussels. Back in the day, it's my uncle Patrick who decided to open a branch here right next to the European Commission.

I think there are two things. The first one is more of a philosophical approach to the world, which is exactly what I was talking about: global free trade. I'm a big believer that not a single country can be specifically good at everything. I think that countries and markets decide what they want to specialize in and be extremely good at it. And I think that the world globally will benefit from every single market's strength. And by the way, in a reciprocal way, every single market's weakness can be compensated by somebody else's strength. And this is what really creates value for the world globally. Right now we're going through instability of course, which I strongly believe is not going to go on forever because at some point we'll find a new balance in this world and this is where the EU has a big role to play. What will this new balance look like? What sectors will we specialize in? What sectors will we depend on others upon? And this will go through new alliances around the world, new trade agreements around the world and redefined existing agreements around the world.

So, three comments. Yes, we are rooted in specific regions and I was mentioning we're an origins industry. We cannot relocate. We cannot reshore. Our products have an origin. There are other industries by the way where we can produce whatever it is that is produced anywhere in the world. It is not our case. We bring origins to people around the world. So comment number one: in that future world we're talking about, we are part of an origin industry which has origins and is deeply rooted in different regions around the world. Point two: going to the Green Deal, we are impacted by the climate and by climate change. We operate in roughly 350 terroirs around the world. All of our products come from mother nature. We work principally with approximately 120 ingredients from around the world. And there is no doubt we share the same objectives as the European Union when it comes to the climate and the environment. My third and final comment, however, is although I fully agree with the objectives and we fully comply on that front and have ambitious goals, I think that the means to get there are probably more straightforward and simple ways rather than finding a very complicated route to get there.

That is absolutely correct. I say two things. I say number one: I fully share the objectives. Number two: I don't share the path to get there because it's too complicated.

Listen, we were the first ones in our industry to come up with QR code references on every single bottle we produce everywhere in the world which gives our consumers around the world direct access to all the recorded information on our products. Our vision is all about finding the right balance. We do not believe in excessive consumption. By the way, to be honest, I personally don't believe in any kind of excess one way or another. I believe in people finding the right balance and having the right information to make the right and informed choices. I live myself personally a very balanced life. I enjoy my drink or two on a regular basis and I find this really great. So at the end of the day, we have very strong policies. By the way, this glass 'drink more water' is part of our marketing which is to tell people just pace yourselves as well. Make sure you drink water. Water is really important. But we're not there telling people we forbid you to do whatever. We really encourage people to find their right balance in life which I think is the number one ingredient to a long-lasting healthy life.

No, the EU market changed a lot of things for Europe. I mean, we're a 450 million consumer market in the world. We're the number one consumer-driven powerhouse in the world. Imagine if things were a lot more simple to operate in that market, how much power that would unleash.

Well, I think we can simplify a lot further. I still think talking about the Green Deal, despite the fact that many of us if not all are on the same line in terms of the objectives we want to achieve, the means to get there should be a lot simpler. It's a little bit like what we were mentioning earlier on: empowering people based on information. I think big companies and medium-sized companies across Europe are fully aware of what's going on from a climate change point of view and have a view on the long-term impacts on their businesses. I don't know a single board that hasn't done the exercise and asked its executive team to work on what's going to happen, do scenario analysis and work on that over time. You know, I was saying we're celebrating our 50th anniversary and I look forward to the next 50 years, and this involves as well having the right roadmap in terms of environment to get there. And I think everybody would like to get there but not through stringent regulations where the cost-benefit equation doesn't really work. And I get a sense right now that people understand that and that cost-benefit is also related to other global players.

We are, and we're a global company. And are we talking fair play globally speaking? When we see that there are different sets of regulations depending on where you operate, the answer is no. If I take the notable example of CSRD and having European big companies report in that degree of detail at global level and being the only ones compelled to do so, I'm not sure it's something which is great. But beyond that again, getting that kind of work done versus just working on initiatives which are making the world a better place to operate in is a hefty challenge which is probably not creating the value we'd like to see created for all stakeholders including the world.

Let's be fair. It's not easy. It's not an easy job for these people to be fair to them. We're talking about 27 different countries that need to align on different topics in a world where it's very simple to complicate things and very complicated to simplify things. And everything might start with a good intention but once it goes through the whole machine of making it happen, what we may end up with is a lot of complexity. But you know like in every organization, I think you have ups and downs from that point of view. And I get a clear sense that people have come to the realization that after all that extra complexity added to the system, there is a need for simplification.

Well, thank you.