Good day, and thank you for standing by. Welcome to the Pernod Ricard Asia Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. For your information, this conference is being recorded.
Now I would like to hand the conference over to your speaker today, Juliana Gracias. Please go ahead.
Thank you, operator. Good morning, good afternoon, ladies and gentlemen. I'm very pleased to welcome you to Pernod Ricard Asia's 2021 conference call. We're hosted today by Peter, our Chairman and CEO for Pernod Ricard Asia. Now most of you will have seen the video we posted on our website this morning.
In the interest of time, we will turn directly to the Q and A session. Operator, if you can exclude our first caller, please.
Fabulous. A couple of questions, maybe 3. Could you just talk a little bit about how Consumption trends are evolving by category and age demographic in China. Clearly, sort of, doing very well, as you referenced In your presentation, strong recovery post the pandemic, you talked about the success you've been having recently with the 10,000,000,000 in the 25 to 30 year old age range. I'm just
sort of wondering, is scotch really skewing those sort of significantly younger in terms of demographic into that 20 to 30 year old age range? How is cognac pairing amongst that age group? And perhaps more broadly linked to that, How are your non cognac and such brands performed in China? What proportion of your sales now are outside of those Two core categories for you. So that was sort of maybe first extended question.
And then just secondly, If you could just talk more broadly across Asia about how you expect investment and marketing support in
the business to evolve over the next
Thank you, Simon. The first one consumption truck price demographics and category in China is pretty a long one and lengthy one. As you know, most of the information we have are based on usage and attitude research, which we run once every 2 years. So it's It's a bit difficult to really look at the impact of COVID, and I don't think this is a major impact. Overall, what we can see is that overall, Wizzia has a global footprint, a more national footprint, a higher level of penetration, but with lower level of consumption, Well, China has the high level of consumptions, very much in the 2 highest consumption provinces, which are Guangdong and And Fuchen, whisky is overall potentially recruiting at a younger age, more some of the J and T and younger millennials, Well, cognac is a bit more of an uptrade and therefore really targeting more of the 20 5 to 40.
So the younger millennials and up to the overall the millennials, We're putting quite a lot of effort as well in recruiting Gen Z, especially in nightclubs and clubs. And as far as blended malt, blended malt is It's growing fast. It's more younger drinkers coming in as well. It's not really cannibalizing cognac. So it's enabling the overall footprint, Overall of IES, open poly spirits to grow in China quite nicely overall.
But as you know that we have a lot of You were all to play and to continue on that. Proportion of sales outside of cognac Whiskey. It's mostly absolute, which is doing pretty well. We have double digit growth and you can see it's a key growth really for us. Overall, we are saying, of course, a bit of Malibu, Cadware and the rest, but absolutely the key growth grade priority for us in China.
So strong investment plans ahead of volumes Clearly, in China, in the years to come, we'll continue, as you said. And for Asia, it's It's an educational game and capacity for us to recruit new drinkers and to educate more consumers to bring them on board of the category. And as a market leader, I think what is benefiting the category of employee spirits is well benefiting. Martell, Chile, Valentines,
Thank you. Our next question comes from the line of Edward Mundy of Jefferies. Please go ahead.
Hi, Philippe. Hi, Julia. Thanks for the presentation and taking the question. I've got 3, please. The first is On some of your medium term growth aspirations, I think historically you thought of India as maybe growing low double to mid teens and China high single to low double.
Are those still realistic assumptions for the medium term? The second question is around India and potential deregulation. I've scratched some recent reports in the news papers that the basic customs duties could Decreased from 150% set to a lower range. If tariffs do come lower, what does that mean for your business? And then the first question is really around Transform and Accelerate.
I think you talked a lot in your earlier presentation around good, Sustainable top and bottom line growth, the Transform and Accelerate around between fiscal 2019 2021. Can you talk about potential opportunities beyond fiscal 2021 To drive sustainable cost of growth and sort of what next for Transform Accelerate in Asia?
So in fact, medium term, clearly, what we had said was The high single digit to low double for China and low double for India. And I think at this stage, of course, I mean, In the long run, outside of those periods, I think this remains pretty relative. And this is Clearly, this is part of the transformative rate direction. As far as India, the potential of the regulations, so that's a very long term opportunity and a massive opportunity for the whole industry clearly. But in fact, today, there is no more and no specific report at this point.
So it's a bit of a question mark. Always said that it's It's going to be nearly 30 years. So I've been very record and 30 years I've been hearing about these potential things coming up. So probably we're closer Any time of this as the U. K.
And Indian Spirit Industry Group have been engaging with the U. K. And Indian governments to secure improvement in And we are fully supporting that. Overall, clearly, it's a spend we call. But at the moment, It seems that things are moving in the right direction, but clearly, it's a long term play that could be transformative, but in the long term.
Last, I think your question were about opportunities going forward Beyond this year, at the moment, we are very much busy in closing this year, but and it's a bit too early To think about opportunities beyond outside of what you just mentioned at the beginning, which is the indication that we give That's doing the strategic plan of transforming XLIB that you just emphasized, except that the fact in India is low double digit. Great. Thank you. Thank you, Rudolf.
Thank you. We are taking our next question from the line of Olivier Nicolai at Goldman Sachs.
Hi, good afternoon, Philippe and Julia. Thank you for your presentation. I've got 3 questions, Please, first, just a follow-up on previous questions. You mentioned a revival of Scotch and Chivas among the younger cohorts. So Just wondering, would
you say that perhaps 70% or 80% of spot shrinkers
today in China below 30 years old? And that will be the opposite for cognac essentially, why it's above 30% to 20%. So that's the first question. Second question is how significant is Hernan Beauty Freehub is today? And if it continues to grow, obviously, could it have an impact on such a mix on margins.
And then just lastly, since In your background of the presentation with some very nice bar with a bottle of Lillet. So I was just wondering, since one
of your competitors is keen
to introduce Quick, Scott. In Shanghai, do you see a potential for Lille in the region as well? Thank you.
Thank you, Olivier. I think my boss will love your third question, but I finished with this. So for revival, Scotch is not really a revival of Scotch. Overall, I think it's a very strong performance of Scotch and of Henrietta Scotch brand in a difficult environment post COVID. Overall, so we have a strong double digit across the board for all our spot brands, which is good.
But in fact, it's really going back to previous trends that we are facing before COVID period. And at the same time, in terms of age group, I think it's a bit of Still flat to say 70% of scotch is below 30 growth. Scotch is very spread out as well across the different category and each category. There is strong recruitment, below 30, but as well there is quite strong retention on the category which have been educated 2010, 15 or 30 years ago. And cognac is really not only a normal man win at all in China.
It's completely the opposite. Very strong in clubs and in high energy nightclubs, even stronger by far than Koch. So and currently Strong as well in Milocations. So Milocation is probably more middle aged 35 to 45 Business people and as well people celebrating, so more family. But as well, in the club, it's 3.25 to 25 You're all crowd, which are consuming cognac and enjoying it in the night out and parties.
So I would say it's pretty balanced Overall, quite a good acquisitions of all the different class stages. And we are very much investing on both Our Skosh portfolio and an market clearly in order to recruit Gen Z and the young millennials below 30. Hi, and duty free hub. It's a massive opportunity. It's a duty free opportunity.
To believe this is the way we're paying it for Pernod Ricard. So in fact, we are really very much constraining ourselves to travelers. In order to capture the needs of travelers, we are buying In at the airport or and at travel, it's Ryan and buying it at the airport. So it's not necessarily direct cannibalizing And impacting domestic business. Coming in addition, it's mostly taking over and taking part of the business that we have lost in Hong Kong Airport, Singapore Airport and the borders between Hong Kong and China.
So overall, it's quite a good complement Any taking up for this business loss with Chinese international travelers, we're now staying in China. So not significant impact on mix or margin impact, even more positive as probably we can Imagine that we have better terms than in airport sales outside of China. And then Lilly, That could be potentially Lele and that's in China, but potentially even more in markets like Japan. So that's a brand which is starting that we are start with At the moment, to activate as part of our specialty portfolio, to deal with MT47, Kinobi And the range, Abalar and as well some Redbrecht. And I think we're starting to Some good traction, particularly in more in Hong Kong or Singapore and where we are looking at potentially going beyond that And testing it in some of the market in order to see consumer reaction.
Perfect. Thank you very much.
We are taking our next question from the line of Sandeep Aujla at Credit Suisse.
So in fact, I haven't heard only China, but the rest of the questions got lost In the echo and the cracking of the line
Apologies. Let me try again. Is that clearer, Philippe?
Yes, that's much clearer. Great.
Great. Okay. So first question, just on the evolution of the channel mix in China, post COVID versus pre COVID. Have there been any significant shifts in things like real occasion, more on trade, post COVID versus pre COVID? Or has
the mix kind of normalized back to what it was?
My second question is more on geographic mix. How much of your business in China today is outside of Guangdong and Fujian? And how fast is that growing? And third question is actually more on Southeast Asia. You really didn't talk about that vision in your presentation.
I'd just like to get a feel for how that part of your business is performing at the right month stage and what you're seeing with regards to the
Thank you, Sanjeet. So China evolution of channel mix Post COVID versus pre COVID, what can we say? Premium prestige channels, which is the traditional trade The rebounded very strongly. I mean, this is the key engine of growth for cognac during the middle of the year. So very strong rebound across the board.
Modern off trade is the same thing. Overall, I think modern on trade, which is the high energy bar and nightclub, This is super this is really booming. After the beginning stage where we had A lower number of outlets with lower footfall and a plan of revenue spending, people spending more on that. What we have seen is people Footfall continued to has been increasing even to a higher level besides COVID. And people continue to spend quite heavily.
So this triggers New night clubs and high energy bars opening. And at the same time as well, what the big Surprised, but in fact, normally we use cross seasonality with lower traffic airport just before Chinese New Year and after Chinese New Year. But as Chinese travel people are not traveling, in fact they have a high level of disposable income. They continue to go out strongly and compensate. They do not travel by going into the modern on trade and spending on imported spirits.
So this channel has been accelerating. Traditional entree remained pretty resilient as well post COVID. And of course, search of e commerce from a low base depends overall in terms of our business, It's growing pretty strongly and with in more entrenched type of consumptions that are yet to stay And pretty high base and now sort of significant share size of our business for brands, for premium brands like Chivas, Regal, Valentine's finest and absolute clearly coming from e commerce, we will be gaining share if you see in video. Geographical mix, so we do not give numbers by region. But As you can see on the back of the expansion of high energy bar and nightclubs, which are nationwide, Clearly, this enabling it enables the recruitment of new drinkers to Pernod Ricard brands throughout The territory and therefore outside of Guangdong and Fujian were still over indexed about to a lesser extent, thanks to the development of Modern on trade, as well e commerce would enable us to recruit and educate new consumers outside of Guangdong and Fujian.
Southeast Asia, very good question. And here unfortunately, not very good news overall The geographies are very strongly impacted by COVID-nineteen, as you know. Most of these markets Either on lockdown or when back on lockdown on the back of 2nd or 3rd weeks, so sanitary registration is pretty difficult In most of the markets as well in addition to what we have seen in India. And on top of that, we have 0 tourists growing in markets like Thailand, where 25% of the overall economy is reliant on tourists and as well business travelers. We are very important In market like Thailand as well the Philippines, Malaysia and Singapore.
So we are in We're trending in high single digit to double digit decline versus A2019 in this market. We're preparing for rebound. We're really clearly recruiting and to ensure that we can rebound, but potentially not before next fiscal and probably not before
Thank you. We are taking our next question from the line of Trevor Stirling, Bernstein.
Good morning, Philippe. Two questions from my side, please. In the China section of the presentation, we saw a lot of Noblishe, we saw a lot of Cordon Bleu also. How is Mattel not with digital Mattel doing in China? And are you managing to make some ground versus the market leader at very, very high price point?
And the second question about Jameson in the region. I thought you said in the Japanese section, it looks like you're using a high ball to lead there in Japan. Just wondering how are you flexing the global positioning of Jameson in the region? And what potential does it have elsewhere in Asia?
Thank you, Trevor. Regarding China and lower, clearly in a Irene, our priority is Shantelu XXO, which has been relaunched. And this is clearly where we really want to put the effort And the brand building capabilities, because we think this is really the sweet spot of trading our range from Cordon Bleu and XO To XXO. And of course, we are seeing opportunity with George De Jean Martel, but this will take more time. So first, So as you focus on Chantal de Acreso with all of activations and an extremely good overall Reaction from consumers.
This is really the sweet spot given the current both political and economic environment. The rest And Laure DeJean Marte would be icing on the cake clearly. Jameson, very happy to have a question about In Asia, overall, we've been making very good progress with Jameson. So you were mentioning about Japan. Korea as well is a market where we've been growing.
And Southeast Asia looks It's truly promising as a whole, particularly with Thailand. So unfortunately, I just mentioned about the difficulty in Southeast Asia before. Thailand, Well, we see a lot of inroads, a lot of progress among the hipster category in the high energy bar and as well in all Some pretty leading edge district of Bangkok, similar line in terms of leading edge and all the other up Scale on trade war in Manila. And we see as well quite very good progress in Malaysia and Indonesia With Jameson, for the moment, it's more international strategy in terms of activations, focus on taste And it's a mode of serving, highball or Jameson Ginger and Jameson Lime, which are the key Cocktail, and that seems to have a very strong appeal among the association. Of course, India It's a big priority overall in user volumes, but that's more a very dedicated whiskey market.
And here, doing very good progress. Continuing as well to the Seating in China. But as you know, we have a pretty strong Scotch whisky portfolio. So again, it's very In addition to it and within on we are there on PD mode.
Super. Thank you very much.
Thank you, Trevor.
Thank you. We are taking our next question from the line of Chris Pitcher at Redburn.
Good morning, Greg. Julia, I hope
you're both well. Two questions
for me. On China, Philippe, you mentioned profitable growth. Is it fair to characterize the last 7 to 10 years as margin compression as you invested in marketing, route to market and building out the sales force We should now start to see margin expansion in China, maybe not from fiscal 'twenty one, but certainly from fiscal 'twenty two. And then secondly, can you update on a couple of your partnerships and give us some thoughts on Baiju In China, how is Wulangi going in Southeast Asia? Is Asia a category you're potentially interested in?
Thank you.
Thank you. Profitable growth, long term profitable growth in China, that's always been the core Our strategy and we didn't see and never had any margin compression. Clearly, there's been some rebasing Post the crisis, the anti ostentatious campaign, 1, in back in 20 12, 2013, so we had some repeating our business more towards the SOP towards Nublish That enable us in fact to capture the new class and the private type of moment of consumption or After that, we've been seeing quite significant growth of volumes, Especially from 2016 onwards and margin at the same time investing, but clearly We are in a constrained category for cognac. Everybody is playing with the same type of constraint. So we're investing to really recruit new consumers, but clearly And here I'm talking for Martell, but I think that the Poland industry is following similar footsteps.
So that's about China. We invest in clearly as well to be able To leverage more whiskey and recruitment, but as well it's always been with profit in mind. Second question about partnership and with Baixeo, with Wulangi in Southeast Asia. We started to sell. It's a bit It's difficult to crack some of the barriers, regulatory and import license and to take that.
But overall, things are taking time. So we are starting to I think to sell in Asia and I think Yes. At the same time as well, we have been picking of what we have mentioned before, which is no Chinese tourists or no Chinese businessmen traveling Through these geographies, so it's really leveraging on the Chinese community and local Chinese community, and there is a lot of education So starting, we are happy with the cooperation, but it will take time.
Just in terms of China buys your opportunity, is that one you see potentially an area
to think you do you think it's interesting?
Or is that something that you're Perhaps to your answer, Rusty.
It's always interesting because it's a massive opportunity overall in massive categories And especially here, both in volumes and in value, premiumizing trading. But there are very few assets for sales or interesting Most of them are government owned and controls, and so it's difficult For us to lay their hands into that and whenever there are assets for sales, in fact, most of They're not that interesting and the PE are extremely high. So the key question would be How to be able to extract value out of that? But never say never. So we Any opportunity, we'll look at them.
Thanks very much.
We're taking our next question from the line of Richard Whittaker with Kepler.
Good morning. Thanks for the question. I have 2, please. First of all, you mentioned in the video a marketing mix Analytics tool in Japan and a key digital program in India. Can you just talk about details of these programs?
And what does it allow you That
you did
not do before. And then the second question is on the gross margins in the AsiaRest of the World segment. They've been relatively stable at 57%, 58% in the past 5 years. So what Are in your view the most important drivers either up or down
of the gross margin in
the next 5 years or so?
Hi, Richard. So the first things about business development programs That has been introduced by Alexandre Car during the latest call in H1 results. So clearly, here in Japan, what we're doing is to developing a proprietary marketing model mix, which is aimed in fact at improving the efficiency of our marketing spend And being able to uplift better strengths according to dashboard, different brands and within key geographies, Well, that's leveraging artificial intelligence. And we're doing similar things in India, more in terms of sales force efficiency, An efficient of time and in order to make sure that we fully maximize the opportunity of ourselves and And the ability to deploy within the different sales outlets. Regarding margin in Asia, so here I think clearly what we have is a few key drivers.
Of course, CanFamix is quite critical overall To influencing the level of margins, especially between China and India, we are a bit at the opposite of the 2 business models of Pernod Ricard here, 1 which is more luxury prestige and the other one which is more premium brands driven. So what we're doing here is clearly continue to work on pricing. And as you have seen, we have taken price up For my colleague in China and in India, in the context of very highly inflationary environment We'll hear whenever regulation applies and not prices us, we'll be picking our price up. 1, 2nd, trading. Trading really clearly ensuring that we put more focus behind our top end brands.
This is the case in China with Martell and the high range of Martell, COLUBRE and EXO. This is as well the case in Yes, with all the emphasis being put behind the Sprite and the Enroll's tag, I wouldn't say and the Pikers and as well as the strategic International Brands, Chivas, Valentine's and Absolute. And then we also have an implementing We are throughout Asia, both on imported brands and locally produced brands, the group operating guidelines In order to ensure that we have we can minimize COGS as a cost increase And ensure at the same time, its robust cost of operations is kept under street control.
Thank you.
We are taking our next question from the line of Laurence Wyatt at Barclays.
Hi, Philippe and Giulio. Thanks Very much for the questions. A couple from me. Just following on from one of the earlier questions on India and regulation. If tariffs were reduced in India, Would you look to pass those tariff reductions on to pricing for consumers?
Or would you look to improve your margins in the country? And secondly, in terms of your product mix in China, do you anticipate more of the growth coming from Scotch from a lower base? Or do you think the growth between Scott and cognac will be relatively broad similar? Thank you very much.
The second one is relative to China?
Yes. Just China, whether you
think scotch will grow at a
similar pace or whether you think one of those companies will grow faster than the other? Regarding India, clearly, it's a bit of a crystal ball. If really We have some future agreement between the UK and India and tariff reduced. There will be quite high and strong expectation for price to come down. I think that's quite clear, both from the authorities And from consumer, this will be sufficiently advertised.
And at the same time, I mean, the key issue we're facing With all our strategy and financial brands, Chivas, Ballantine's, Jameson, which is a bit off the tariff negotiation, It's really price availability, price accessibility. So I reckon that in fact Quite significant portion will go into price in order to boost volumes and be able to educate A wider number of consumers. Just wanted to take the example, for instance, of Kanata Car Bangalow or which is the IT hub. A bottle achieved as we go cost $90 I mean, so at this level of price, it's hardly impossible to have given some of these Young IT consultants, even if they are making color of money to afford bulk of Kivas regularly, so that's going to be very celebratory type of occasion. And probably another part We'll go in terms of educating and therefore recruiting more consumers and expanding solutions and expanding Activations and Building a 1,000,000 Consideration.
So Always with the long term, of course, profitability in mind. But at the beginning, I think we'll have to do the heavy lifting in terms of investments. China, and I wish this time would come and that we have to make this choice, but not too sure that we are In terms of China, I think as you've seen so far, if we look at the past 5 years, 6 years In terms of CAGR, cognac has both in terms of volume and value has grown more or less twice as fast as Scotch whisky overall. So Cognac is very dynamic. Scotch has been in fact, it's has been less dynamic With the decline of blended scotch or being flattish, which used to be the bulk of the volume and a quite sharp increase of malt whiskey.
So moving forward, we are clearly confident that we continue to grow That's hopefully high single digit numbers, between mid single digit to high single digit. And overall, for scotch, we should be in similar line, but probably with a higher level of generalism Of MOLT, but I mean that's a bit difficult to predict, but that's where we stand at this stage, Given the current dynamism of both categories, cognac and more whisky. What will happen clearly, we can anticipate at some stage and there could be some supply pressure on both these two categories. And this could trigger as well We appraisal stronger appraisal of blended cost of whiskey, where inventory at a higher level And less constrained, so let's see exactly. So this could as well come into the equation.
But I think This is hoping that we have a few years of stability, which was not been the case over the past 2 or 3 years.
Thank you very much.
Thank you. Taking our next question from the line of
Hello. Thanks for taking my questions. I have three quick ones. Could you please also give us some color on how the competitive landscape is evolving as others also get behind this opportunity? And then finally, a very quick follow-up on Hainan.
Once international travel is back, so longer term, not the near term, How would you expect sales in Hainan to evolve? Do you think it will be incremental to travel retail elsewhere? Or should we expect some shift back to other travel retail zones?
Thank you. Thank you, Bernard. Just could you again come back on the second question about market growth opportunity and competition?
Yes, sure. So on whisky, you made it clear there's a very big market growth opportunity, but I was interested in hearing your thoughts about competition. How is the competitive landscape evolving within the category?
This category is Asia. Asia? Yes. Specifically,
actually, sorry, I should have clarified. I was thinking more China, actually. Apologies.
About wine, there is a very strong strategic fit within Panorica portfolio clearly, Especially in Asia, I think we see a long term opportunity for growth. Of course, in our midstream market, China and India, We have very strong positions and a strong very strong fit both in terms of the portfolio because it's only capturing Different moment of consumptions. This is more female driven overall. This is more middle occasion As well and at the center more paying on the low alcohol payers. So that's and as well quite a strong fit in terms of route to market.
As I was saying, it's more in modern off trade and as well as e commerce And enabling the whole portfolio and the demilitication and restaurant, the whole portfolio to penetrate better So very strong strategic fit in the 2 must win market, but as well in Southeast Asia, Africa, Thailand And in the Gulf as well, and we see as well opportunity in Japan overall across the portfolio. So very synergistic and profitable And growing in line with consumers development of this segment, which I've mentioned before. China competitive landscape for whiskey, I think market growth opportunity It's pretty well played. As I said, we are a market leader overall in terms of cost. We see strong market leader with a strong benefit From a strong advantage of CAP compared to our key competitors, we are playing on 4 different brands, Catherine, 2 different type of consumer segments, different needs states and different type of occasions.
As you know, between Chiva, Pantan's finest, Royal Salute and The Glenlivet, I think as I said, a single malt at the moment is more buoyant And growing at fast pace as we're all benefiting from the hardware effect coming from Taiwan And the Taiwanese consumers and travelers, that's why as well we've seen quite significantly in Taiwan behind the Glenjet, that is well benefiting Rosalu. So I think that and competitors are as well, some of them giving share in this gaining volume, some traction In single mode and other, I'd be lagging behind. Overall, clearly, we really want to continue To commend a strong and significant market needs and continue as well To educate new consumers and put them into the category. Hainan evolution. Yes, we See clearly, Hainan, as a potential new market for our brands, Even when international travel will resume, it's not going probably to be next year, in fiscal year 2022, We see a lot of Chinese travelers outside of China.
This will take gradual. This will take time. Nevertheless, once the Chinese travelers are back On international times, Hainan will be able to recruit or to bring in New people, new travelers before were not traveling or traveling only within China or visiting only Hong Kong. And they will go to Hainan as a destination both for to benefit from the beach and as well from shopping opportunities. So we think that's going to be incremental to the role To the Unifin business, potentially taking a bit of share from the what the business
Welcome.
Thank you. We are taking our next question from the line of Andrea Pistacchi at Bank of America.
Hi, good evening, Philippe. Hi, Giulia. Couple of questions, please. The first one on the Premium Spirits business unit that you set up in China. You've talked about some of the brands.
I'm just wondering compared to your sort of expectations when you set up this as a separate business unit a few years ago, how is this progressing? And Initially, I think you focused on 30 cities. Have you moved beyond that yet? And then I think that a question earlier, you were saying for cognac potentially to grow mid to high Small digit in China and scotch, if I understood correctly, similar to that or a bit more. But at the same time earlier, you were saying that you continue to expect China to grow sort of high single digit to low double digit.
So just wanted to square that a little. Of course, the other smaller international brands should all grow Strongly, please. And then my last question, if I may, is a broader question on route to market. In Asia, you're Constantly adapting and assessing your route to market. Recently, you made the changes in Korea.
So I was wondering whether what we should You're happy with your offering now, whether we should expect any changes with the market? Thank you.
Thank you. Premium BU in the premium business unit in China is really very much in line with our expectation, even doing better. We are just looking at the business case that we built 5 years ago a few weeks back and we are Even compared to the digital business, please. So we're making very good progress, very happy. And as you can see, most brands are growing double digit And even faster.
And even during COVID times, in fact, there is clearly Strongly growing, both absolute, mass and finance and the rest of the portfolio of wine. So further expansion, I think now we are in a higher number of cities. From the top of our mind, we should be probably close to 50 or 60 cities It's operating, but that's something that we need to check and we'll confirm. Nevertheless, I think the expansion is growing and we can continue and we are continuing to further So I think this is quite a benefit to it. And at the same time, we're either Doing direct or being a distribution led thanks to some dedicated service.
So I think pretty much in line and extremely happy with the overall development. China, I can really confirm a high single digit to low double overall for the country. On the back of cognac, which is probably more mid single To high single, sorry, to high single of Rohan. So mid single to high single for Cognac. And we see probably around Similar lines, despite the fact that we are over indexing on blended scotch, which is not doing as well as single mode, as I said.
So confirming high single digit and low double for the whole of China, it makes sense overall compared to The market forecast and progress that we can plan. Growth to market, Korea. Yes, we In fact, move away and believe the distribution of Imperials, so our whiskey, Korean or so called ex Korean We see a lot of whiskey to an excellent distributor last year. It seems that going pretty well for Pernodica Korea As we're growing double digit. And as I said, as I was saying in the video, that's probably one of the first time, at least for me, Being major call, but I'm talking about growth in Korea and so not even talking about double digit.
So very happy about the choice It's really enabled the sales team to focus on modern on trade and expression of trade. And the fact In Korea, modern trade is very much impacted by COVID and continue to be impacted by COVID. A lot of trade is doing fantastically well And it's clearly compensating even more than compensating for the decline of modern on trade. And all our swaging international brands are up double digit in particular, Valentine's, which is making a very strong comeback, which But as well, you have seen Malibu, for instance, in absolute, mostly the innovation of absolute juice. So no further plan for the time being.
I think we'll be opportunistic, again, depending on the market situation. Overall, in terms of group to market change in any other geographies of the region, but if there are any opportunities To see the readjustment to be done in clearly in the framework of our Fit for Purpose organization, we'll be doing that.
Thank you. Welcome.
Operator, do we have any other callers?
We don't have any other questions on the line. Please continue.
Okay. Thank you very much, ladies and gentlemen, and thank you very much Fare to Fideep for hosting this call. And please stay safe and enjoy beyond trade wherever you are.
Thank you very much. Great talking to you and all the best and hope to see you soon at some stage face to face.
That concludes the conference for today.
Thank you for participating. You may all disconnect.