The drinks giant which owns Dumbarton-based Chivas Brothers has highlighted a "sharp decline" in China as it endured a difficult start to its current financial year, underlining the difficulties Scotch whisky is currently facing in the export arena.

Pernod Ricard declared that sales in the first quarter had been slower than expected, amid challenging conditions in a host of key markets, including the US.

The company reported sales had plunged by 26% in China amid ongoing macroeconomic weakness which it said has undermined consumer sentiment in the country and affected the travel retail market across Asia.

Sales tumbled by 10% in the US, where the spirits market is continuing to “normalise” following the boom that immediately followed the pandemic, and by 3% in Europe, where its performance was affected by “adverse weather conditions over the summer”.

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Pernod, which owns brands such as Chivas Regal, Ballantine’s, and Royal Salute through Chivas, also highlighted challenges in India, where strong underlying sales growth was impacted by “technical sales phasing”, although it expects these effects to "fully reverse" in quarter two.

Sales increased in India by 2% in the first quarter, with the company also pointing to growth in markets such as Canada, Brazil, Japan, Poland, Turkey, Nigeria and the travel retail in the Americas and Europe, which helped offset declines in China, the US and Europe.

Overall, the company reported that sales for the quarter had dropped by 5.9% on an organic basis to €2.783 billion. This reflected a 10% fall in sales of strategic international brands, mainly driven by Martell Cognac in China, Royal Salute in Korea, and The Glenlivet in the US. Sales of speciality brands decreased by 9% largely because of performance in the US, although the company reported "good results" from Bumbu, Redbreast and Spot Range Irish whiskies.

Despite the challenging start to the year, Pernod declared that it expects to report growth in organic net sales for the full year “with continuing volume recovery and to sustain organic operating margin”. It reiterated its confidence in achieving sales growth at the upper end of the 4% to 7% guidance.

The Pernod Ricard update comes after figures published by the Scotch Whisky Association in September revealed a steep fall in the value of exports amid "volatile" geopolitical and economic conditions in the first half of the year.

The value of exports dropped by 18% to £2.1 billion, which included a 42.4% fall in the value of shipments to China to £77.9m. Exports to the US decreased by 3.5% to £421.4m but surged to India by 11.9% to £105.7m.