Pernod Ricard doubles profit amid pending closure of its Tamaki bottling facility

Pernod Ricard will next year close its Auckland bottling facility. Photo / Greg Bowker

Pernod Ricard's New Zealand unit doubled its profit in the year to June 30.

The French wine and spirits company's Millstream Equities posted an annual net profit after tax of $18 million, up from $9.9m posted a year earlier, according to financial statements lodged with the Companies Office.

Pernod Ricard generated revenue of $261m from local sales in the year compared to $250m a year earlier, while costs of sales increased to $195m from $165m. The local division of the company posted a loss in the last financial year after it booked a $150m goodwill impairment.

The improved result comes as Pernod Ricard prepares to wind down operations at its Tamaki wine-bottling facility in Auckland and layoff all of its 90 staff.

Pernod will began laying off staff from March next year, with most expected to finish between April and June. The facility is expected to close for good in December, and production outsourced to "third-party support" in Auckland and to
its existing wineries in Blenheim and the Hawke's Bay.

The company told the Herald the facility was "difficult to sustain", and two major contracts had come to the end, impacting its decision to close the site.

"We have invested a lot in the site over the years, but with clearly ageing infrastructure, and the changing nature of the Glen Innes area, [it is] putting constraints on operations," Brett McKinnon, Pernod Ricard's chief operations officer, said.

"The site is proving difficult to sustain in its current state and we need to evolve - this is the primary reason for the closure. It is important that we improve our operational efficiency to create the conditions to better capture growth opportunities, both now and in the future."

Workers and about 25 E tū union members from the Tamaki facility were told of the company's plan to close the site in the second week of November, with the consultation process taking effect shortly after.

Raymond Wheeler, team leader at E tū, told the Herald "economic headwinds" had hit Pernod Ricard, along with the loss of a couple of major contracts, which had forced the company to make the decision to close the production facility.

The union said it was satisfied with how Pernod Ricard had handled the situation with its staff.

Millstream owns a number of New Zealand wine brands including Brancott Estate, Stoneleigh and Jacob's Creek.