Pernod Ricard Korea, focuses its efforts to prepare survival measures amid fierce battle with labor
Pernod Ricard Korea, focuses its efforts to prepare survival measures amid fierce battle with labor
  • Kim Su-a
  • 승인 2019.02.01 15:42
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Pernod Ricard Korea’s conflict with their labor union is intensifying as the company is selling-off its whisky brand ‘IMPERIAL’ and carry out restructuring.

Global wine and spirits company Pernod Ricard Korea announced on Jan. 22, plans to sell off its domestic whisky brand ‘IMPERIAL’ and carry out restructuring of its organization to reduce around half of its current employees. The firm decided to sell off its ‘IMPERIAL’ distribution rights, as the brand was experiencing lack of growth in within the domestic whisky market, which has been declining for ten consecutive years.

In fact, shipments of whisky in Korea have declined from 2.84 million boxes (1 box of 9L) in 2008 to 1.5 million boxes in 2018.

As the market have shrunk down due to few factors such as long-term economic recession and the changes in consumption trends, the liquor firms are focusing its efforts on new businesses to regain competitive advantages in the market. Local whisky brand Golden Blue Co. had signed an exclusive contract to distribute and sell with Denmark beer brand ‘Carlsberg’.

While, a British liquor firm Diageo Korea also introduced their double-hop craft lager beer ‘Hop House’ to strengthen its beer portfolio. On top of this, OB beer, which is leading the domestic beer market, have introduced happoshu ‘FILGOOD’, targeting younger generations to change over the currently depressed market.

Through a change in business model, Pernod Ricard Korea will focus its efforts on Strategic International Brands including Ballantine’s and Absolut.
“With a more efficient organization and a renewed focus, Pernod Ricard Korea will transform into a fully consumer-centric company regaining a competitive advantage in the market” said Jean TOUBOUL, CEO of Pernod Ricard Korea. Furthermore, the firm plans a ‘New PRK’, which will focus on growth opportunities supported by existing and emerging consumer trends.

In order to transform into ‘New Pernod Ricard Korea’, the firm is opening an ERP for its employees. Pernod Ricard Korea has prepared 50 billion KRW of compensation for retirement and will be providing up to 69 months of salary with severance pay for the ERP applicants.

Also, the firm is planning to fully support the retiring employee who wishes for a new start including lending loans for new business and counselling for former employees.
IMPERIAL whisky was introduced in the domestic premium whisky market in 1994. The brand had led the market through its smoothness which was favorable for consumer taste.

However, as the brand recorded consecutive years of declined sales, their No.1 position also had to be passed on. Nonetheless, IMPERIAL is a major brand which takes large portion of Pernod Ricard Korea’s total sales. It seems that the firm’s decision selling off its brand and carrying on large scale restructuring is part of their efforts to continue its business in Korea by regaining competitive advantages within the Korean market.

However, it is drawing attention what will Pernod Ricard Korea’s reorganization bring to the domestic whisky market, where the firm had declared ‘New Pernod Ricard Korea’ amid fierce conflict between the labor and management on the firm’s restructuring.

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