Ladies and gentlemen, thank you for standing by, and welcome to the FY 2021 Q1 sales 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. To ask a question during the Q&A session, you will need to press star and one on your telephone. I must advise you that this conference is being recorded today, Thursday, 22nd of October 2020. I would now like to hand the conference over to the first speaker today, Ms. Julia Massies. Thank you, and please go ahead.
Good morning, ladies and gentlemen, and thank you for joining our Q1 fiscal 2021 sales presentation. We're hosted this morning by Hélène de Tissot, our EVP for Finance, Production, and IT . Without further ado, let me hand over to Hélène.
Good morning to all. Let's start with our presentation of the Q1 net sales performance. We are delivering an encouraging Q1 for this fiscal year 2021, which is at -6% from an organic point of view, -10% from a reported point of view. In more improvement versus Q4 of fiscal year 2020. This is due to the partial on-trade reopening and the continued resilience of the off-trade. If we look now at our markets, the off-trade remains very resilient in the U.S. and Europe. Our markets are benefiting from the partial on-trade reopening, though this channel is still disrupted. This is a good start in the U.S. and China, with strong shipments ahead of festive season. India is in double-digit decline but improving versus last year. Good resilience in Europe, thanks to the off-trade resilience and the staycation that happened over the summer.
We continue strong dynamism in markets like the U.K. and Germany. We are near stable in France, but declining in Spain, which is a market very much exposed to the on-trade and Russia. Travel retail is still in very significant decline in spite of some domestic travel resuming. Moving now to brands. Our strategic international brands are in decline by 10%, with significant decline for Martell, Chivas, and Ballantine's, due mostly to travel retail, but continued strong growth of Malibu and The Glenlivet and resilience of Jameson. Strategic local brands are on decline -6%, with decline of Seagram's Indian whiskies, but double-digit growth of brands like Kahlúa, Passport, Ramazzotti , and Wiser's. Specialty brands are in strong growth, +30%, thanks in particular to Lillet, Malfy, Aberlour, our tequila brands, Avión, Altos and our gin, Monkey 47.
Strategic wines are in growth as well, +9%, driven by double-digit growth of Campo Viejo and Brancott Estate and Jacob's Creek, which is growing by 8%. If we move now to our four must-win markets, starting with the U.S. U.S.A. is growing by 6%. We qualify the market progress, thanks to strong off-trade resilience and on-trade reopening. Q1 sales have benefited from good shipments ahead of festive season, but some adverse channel and category mix. Jameson is in good growth, driven by original and continued development of Cold Brew and Black Barrel. We had, well, continued strong dynamism of growth relays like The Glenlivet, our tequilas, Altos and Avión, and American whiskey portfolio, and a very dynamic growth of tried and trusted past brands like Malibu and Kahlua.
Global travel retail is down -64%, decline obviously largely due to the passenger traffic, which is still significantly down versus pre-COVID-19 levels. Very limited sell-out trend improvements versus our last quarter of fiscal 2020. Today, some positive impacts of the opening of Hainan Island in China to spirits, duty-free sales that happened first of July. China moving to returning to growth, +4%. Good growth supported by the on-trade recovery and selling ahead of Mid-Autumn Festival that happened the first week of October. Martell sell-in are stable, but depletions are in double-digit growth, I'm referring to the July and August wholesale depletions. Chivas Regal is back to high single-digit depletion growth. Our growth relay, Absolut and The Glenlivet , are continuing as well to develop very strongly. India, -13%, which is improving versus Q4 fiscal year 2020. The market is still largely impacted by COVID-19.
That's why the demand is still in double-digit decline. Selling ahead of sell-outs in key states in order to avoid some disruption in terms of supply chain before festive season, namely Diwali in November. Our strategic international brands are very resilient, with in particular double-digit growth of Jameson and Ballantine's. I move now to the other key markets in Europe. Europe is posting a performance of -5%. France is at -2%, which is showing an improving trend that is the last quarter of fiscal 2020, thanks to the on-trade reopening. We had a hard basis of comparison last year where Q1 was growing by 3%.
Spain is down -26%, and this is due to the significant on-trade exposure in that market in the context of the summer where night and trade were closed. As well, strict restrictions happened for bar and restaurant with lower tourism in July and August. U.K. had a strong growth of +22% with broad-based acceleration, with a off-trade that remains quite dynamic and more than offsetting the decline of the on-trade. We have a lot of positive pricing thanks to the increases that happened in Q4 fiscal 2020. Germany, double-digit growth as well, +12%, with strong growth driven by brands like Lillet and Ramazzotti, with very strong price mix on strategic brands. Russia is delivering a double-digit decline in its first quarter due to lower on-trade demand and as well a high basis of comparison. Russia was growing by 13% last year at the same time.
Poland is in double-digit growth due to the strong development of Jameson and Ballantine's Finest. Moving now to Americas, which is growing by 5% including U.S.A. A strong growth in Canada with some advanced shipments, the growth is primarily driven by Jacob's Creek, The Glenlivet , and Absolut. Brazil is in gradual rebound, but this is as well enhanced by favorable phasing. Mexico is growing, driven by strategic international brands and Passport with a low basis of comparison. Asia, r est of the World, including China and India, in decline by 12%, with Japan declining due to limited footfall in the on-trade during the first quarter, but a resilient price mix. Korea is growing by 13%, driven by strategic international brands and positive pricing based on positive phasing in those figures. Southeast Asia, most countries are still impacted by the pandemic and trade disruptions.
Africa, Middle East is in decline, primarily driven by South Africa at -42%, with still very strict rules throughout Q1 and even a new ban that happened in the summer. Despite continued strong performance in Turkey, +29%. Moving now to our conclusion and outlook. Q1 of fiscal year is in decline but earmarked improvement versus Q4 as expected, thanks to brand resilience in the off-trade and partial reopening of the on-trade. For the full year 2021, Pernod Ricard expects continued uncertainty and volatility, in particular relating to sanitary conditions and their impact on social gatherings and travel. We expect a lot of challenging economic conditions. The off-trade will remain resilient in the U.S. and Europe, but prolonged downturn in travel retail and on-trade disruption throughout fiscal year 2021. We expect return to growth in China and gradual improvements in India.
Q2 to still be strongly impacted by COVID-19, but sales to return to growth in the second half of fiscal year 2021. We're going to continue implementing our clear strategy with the acceleration of the digital transformation. We will as well continue to have a very strict cost discipline with the agility to reinvest to adjust to evolving market opportunities.
Thank you very much, Hélène. We will now take your questions. Operator, please can you open the line for questions?
Thank you, ladies and gentlemen. We will now begin the Q&A session. Those who wish to ask a question, please press star and one on your telephone. Once again, star one if you wish to ask question. All right, our first question comes from the line of Edward Mundy from Jefferies. Please ask your question.
Morning, Hélène, morning, Julia, morning, everyone. I've got three, please. I think in the first quarter, there was some shipment phasing impact after the sharp decline in Q4. I was wondering whether you're able to indicate what you think your depletions were in the first quarter. Second question is, on your guidance, you expect Q2 to still be strongly impacted by COVID-19, which implies that Q1 was also strongly impacted. Is the read that Q2 will not be worse than Q1 at this stage? The third question is around travel retail. We've had now a couple of quarters to look at the weakness. Do you get a sense that that consumption occasion from travel retail has shifted into other channels such, the traditional off-trade?
Ed, sorry, just on your first question, please. The sound broke up a little bit. You were asking about shipment phasing. What geography were you referring to, please?
Yeah, just there's some shipment phasing impact after the very sharp decline in the last quarter. Do you have a sense as to what your depletions were in the first quarter?
This is a global question?
Yes. Global question. Yeah.
Okay, let me start with this one. I think, as you said, we had an encouraging Q1. This is largely due to the fact that the off-trade is still holding very well despite the on-trade reopening in key geographies like the U.S. and Europe. When it comes to, let's say, phasing or significant difference between shipments and depletion. To simplify the answer, I would say there's nothing very specific to highlight. We have some slightly, let's say, higher shipments that we mentioned earlier, like in India, but it's only a question of few days to support, let's say, great logistics and supply chain for the weeks to come in the festive season. The figures for India is probably a bit better, but the underlying demand, I would say, for the other geographies, there's nothing significant to report.
Please let me know if this is answering your question, because the sound was really not great. Your second question in terms of guidance and Q2 versus Q1. Well, it's fair to say that Q1 has been encouraging with a significant improvement versus Q4, which was expected. Moving now to Q2, we believe that we cannot assume at that stage that Q2 is going to naturally improve versus Q1 for the following reasons. First, quite obviously, there's some more restrictions coming on a daily basis in Europe with respect to the second wave of COVID, which is disrupting on-trade and social gatherings probably even more than in Q1. We have some positive staycation effect in Q1 that we do not expect will happen in Q2. GTR is not improving, and we don't believe it will in the coming weeks and months.
India is still in a slow recovery mode, and as I just mentioned, the Q1 figures is probably a bit stronger than the underlying demand. We have as well some phasing in Q2 compared to last year with the Chinese New Year phasing, which is three weeks later this year than last year, meaning it's going to be reset versus end of January last year, which should impact Q2. There is still a lot of uncertainty around Q2 and what would be the outcome of the Mid-Autumn Festival in China, and obviously as well, OND season in, I think, the Western world. That's why we believe that we cannot assume that Q2 really can improve versus Q1. Your last question on travel retail and shift to domestic. That's fair to say that this is happening. It's probably quite difficult to quantify.
Yeah, this is happening in many geographies, but so we cannot quantify that.
Great. Thank you.
Okay, thank you. Your next question comes from the line of Sanjeet Aujla from Credit Suisse. Please ask your question.
Morning, Hélène and Julia. A couple of questions from me, please. Firstly, on the U.S., the +6% figure you reported, is that in line with your sellout trends? Where do you think the market is growing right now in terms of sellout in the U.S.? Just a follow-up on China. Can you just talk a little bit about what you're hearing anecdotally of a Mid-Autumn Festival, and within your sort of Q2 Martell depletions, how the on and off trade is performing, please? Thank you.
Okay. Starting with your question on the U.S. Well, first, maybe let me answer the question on the market. Well, it's obviously still too early to say what could be the more, let's say, normalized long-term trend, knowing that we have only a few weeks behind us for fiscal year 2021. Market trends look better than in Q4, and this is driven primarily by the recovering of the on-trade and the off-trade holding well despite the reopening of the on-trade. It would appear that the market is growing faster than its long-term trend, which was just up +4%, let's say, before COVID.
We see as well the consumer trend that we were referring to for fiscal year 2020 being still very true and consistent, meaning the strong alcohol consumption, the continued success of tried and trusted brands, as well the e-commerce trend, still a strong premiumization as well. All those things are quite consistent with the end of fiscal year 2020, spirits are still the most dynamic category in beverage. That's what I can say for the market dynamics. Moving now to our sellout performance. Our sellouts are back to growth, this is thanks to the on-trade improvement and to the strong resilience of the off-trade. We believe we can achieve volume consistency with the sellout, meaning mid-single digits.
Again, it's just two months of data for our sellouts, and OND is just ahead of us, which will obviously give a much popular indication in the coming weeks. If I move now to your question on China. For Mid-Autumn Festival, too early, I'm afraid. We're going to have the depletion results in November, I cannot give you a preview of what's happening from us. Our insights are strong. For the, let's say, performance of the trade, it broadly reopened both we see on the off-trade and on-trade. For the on-trade, we believe that 10% of it are probably not coming back into business, the footfall in the on-trade is still improving as it's this summer, probably not at the pre-COVID levels.
We see as well some higher level of spending per head, larger basket size, which means that it's probably, let's say, normalized because of that trend.
Got it. Thank you. Sorry, I didn't quite hear your conclusion on the U.S., but was it sell-in is consistent with sell out at mid-single digit? Did I hear that correctly?
Yeah. We are doing now with the sell-in, which means that probably mid-single digits for the sell out. I was making a remark saying, well, we only have two months of data. Can you hear me well?
Yeah, I can hear that.
Okay. We only have two months of data, so it's a bit too early to say. Obviously, we are just ahead of OND, which will give us a much better indication of the understanding.
Got it. Thank you very much.
You're welcome.
Okay, thank you. Your next question comes from the line of Laurence Whyatt from Barclays. Please ask your question.
Morning, Hélène. Morning, Julia. Thank you very much for the questions. Following up maybe on Sanjeet's questions about China. It sounds like the depletion level is, you said it was in double digits, yet your sell-in was only about 4%. Could you give us an idea of your stock levels in China? Do you think that the stock levels are now going down? We understand that at the end of your full year 2020, your stock levels were back to normal levels. Do you think your stock level is now a bit lower than they would normally be? On travel retail, what's the impact of Hainan Island? It's still very early for that channel to be open. Is it a very small part or is that a bit more material, it's why y our travel retail numbers are slightly better than perhaps people expected?
Finally, in the U.S., you've mentioned resilience in the off-trade as the on-trade returns. Would you expect that trend to continue if people continue to work from home in the sort of brave new world that we are starting to see? Do you expect that to sort of die down as people return to the on-trade? Thank you very much.
Thank you. Starting with China, your question was on the stock level. I would say, anyway, we believe we have a broadly normative level of stocks everywhere given the period of the year. For China, we don't have the depletion for the month of September, so too early to give you the most updated view including what would be MAF performance as I just mentioned. We believe we have a normative level of stock for the period of the year. As you mentioned, we had a healthy level at the end of June, so we will be able to comment more when we have the MAF figures. Likely to be healthy. As I mentioned, we have some early insights on mass, which are strong. On travel retail, your question, Hainan, is a very good question.
Our performance, as you saw, you have -64% for Q1 net sales, which is probably a bit better than the volume performance. By the way, when you look at the passenger traffic figures, it's more -80%, which is quite consistent with our volume performance for the quarter. Our net sales performance is a bit better than our volumes performance thanks to mix, which is positive, and this is linked to the performance of two brands, Martell and Royal Salute, that are more resilient than the rest of the portfolio. For Martell, this is linked with the beginning of some shipments to Hainan, which as you mentioned, is an opportunity. This offshore duty-free island has enabled liquor to benefit from this duty-free system since first of July.
This is an opportunity that we will obviously capture in the coming weeks, and which has already some positive impact on our Q1 figures. U.S., I think your question was a long-term trend. Obviously, it's a bit early to give you any definitive view of what could be consumer trends and, let's say, shift from the on-trade to the off-trade. Well, what we can say is that so far we believe that the on-trade will be back. Obviously, it's going to take a bit more time with everything happening around the pandemic evolution.
As I briefly mentioned before, we can see in this Q1 in the U.S. some quite similar consumer trends than, let's say, between March and June, meaning there is a very strong at-home consumption with a small group at home or off home that are probably replacing big gatherings and moments of consumption around, let's say, relaxing. They went as well some rival beer locations, this is probably fading a bit when consumers have other choices. There's a search for quality, for availability of the brand, and reliability and convenience. We believe we have a strong portfolio to meet these consumer demands.
Thank you very much for the clarification. Just one follow-up on the travel retail. If you're shipping into Hainan Island at the moment, can we assume that that 64% in travel retail is then ahead of the depletions you're seeing?
Based on phasing in the shipments, I would say that the 64% is probably more supported by the positive mix I was referring to, meaning the resilience of Martell and Royal Salute.
Thanks.
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All right, thank you. Your next question comes from the line of Simon Hales from Citi. Please ask your question.
Thank you. Morning, Hélène. Morning, Julia. Just to kick off for me, Hélène, can you just clarify again some of your comments around the shipments versus depletion trends, because you called out in the presentation, a number of sort of shipment build that we've seen in the U.S., I think Canada, a bit of it in China ahead of Mid-Autumn Festival, also in India, ahead of some potential disruption there ahead of festive season. Just to clarify, I may have missed it because the line was a little bit bad at the beginning. Are you saying that actually the headline organic sales delivery that you've reported in the Q1 of just under -6%, that is a real representation of the true underlying depletion trends that you've seen on a global basis? I'm just trying to square the circle there.
I wonder if you could also just talk a little bit about just the performance in France that was particularly impressive given the comparative that you saw. You mentioned the on-premise was reopening. Is there anything else specifically going on there at the brand level, that sort of reinforced that good Q1 performance? Finally, I wonder if you see any particular comments on the development of your online and e-commerce business in the quarter would be interesting, please.
Okay, thank you. I'll start with your first question. You're right, it's true that we pointed some markets for which there is some positive saving and that's very true for Canada, for instance. We mentioned as well that for Brazil, I would say, to answer your question in terms of global trend, it's true that the Q1 performance is probably a good measure performance. It's a good reflection of the depletion performance. You mentioned as well for U.S. and China, the shipments ahead of festive season is, I would say something which is quite as well normal at this time of the year. Obviously there's sometimes some phasing in China with Chinese New Year and festive group, having as well strong shipments ahead of OND in the U.S. is something that makes lot of sense that has been happening for how many years now.
No significant gap between shipments and depletion at group level. I hope this is answering your question.
Yeah, that's great. Thank you.
Okay. Thank you. Moving to France. I think it's true that the outlook has been probably quite good versus Q4. This is as well linked to the reopening of the on-trade during summer and the off-trade, which is quite good. Obviously, moving to Q2, as you know, we are under curfew since the last Saturday. This is obviously in some cities. This could be extended to night, based obviously some impact on trade. Let's see. This improving trend again, is probably linked to as well a staycation impact in France that people, most of them, I would say, stayed in France and had some good consumption during summer. For the online, I would say quite similar to the trend we described for the previous entity. This is accelerating in Q1 well.
Operator, can we turn to our next caller, please?
Yes. Once again, as a reminder, for those who wish to ask questions, please press star and one. The next question comes from the line Olivier Nicolai from Goldman Sachs. Please ask your question.
Hi, good morning, Hélène, Julia. I've got three questions, please. First on the U.S. The Malibu brand has been doing very well now for a number of quarters. Could you please provide some details on the initiatives you've done and how you managed to outperform the rum category, and if you think that that growth for the Malibu brand is sustainable? Second question is again a little bit on the U.S. Just to follow up on the restocking effect that you've seen in many markets in Q1, and you mentioned the U.S. as being one. Do you interpret this as a sign of confidence from wholesalers for the coming festive season? Do you think it's just motivated by perhaps other factors, like potential price increase or tariff or anything like this? Just lastly, could you help us a little bit navigate the numbers in India?
Because it's been very volatile. Q4 was down significantly, Q1 down 13% on your sales. Now, are you able to give us an idea of what has been the exit rate in terms of depletion during this Q1, and how you think it will evolve over the next year, and if you think that India could go back once the restrictions are lifted to that midterm trend of the digital growth? Thank you.
Okay, thank you. Maybe I'll start with the U.S. You were asking questions on Malibu. It's true that this is a brand which has a vast amount in the U.S. for us, which is performing very strongly, as you mentioned. This has probably been amplified since COVID, I would say. The reason for this strong success is, I believe, a very consistent way of activating the brand, simple and consistent way for many months. The summer activation has been very successful during that summer as well. It's as well the brand which is strongly exposed to the off-trade, and that's probably the reason why we've been so successful. I would say it's obviously a very strong achievement to be delivered by a blockbuster brand. We are very happy with the success of Malibu in the U.S.
Your second question in terms of restocking in the U.S., well, I would say our view is that the level of stock in the U.S. is normative given the time of the year. We assume for the full year, as we mentioned during our previous communication, selling equals sell out in the U.S. India, your question on the exit rate, I would say, as I mentioned before, this -13% less sales performance in India is probably a bit stronger than the underlying demand. We believe that in the off-trade, which is quite a fully open depletion, are probably at just 80% of pre-COVID levels. That's where we are at the end of Q1. On-trade was closed and has been reopening very recently in some region, like in Delhi, but this is really based on a regional decision. Moving forward, we believe that the situation will improve.
Right now, it's not back to normal. Our production is not back to 100% either, but it's quite aligned with the demand trend that we're referring to. We believe we should come back to 100% production capacity progressively and be fully operational at the end of H2.
Okay. Thank you very much.
All right, thank you. Your next question comes from the line of Trevor Stirling from Bernstein. Please ask your question.
Good morning, Hélène. Two questions from my side, please, Hélène. The first one is, you referenced strict cost discipline in the presentation. As you're now sort of starting to think about perhaps putting some money back into the business, do you think you've identified permanent cost savings, or was it largely things discretionary spend that you stopped but will come back? The second question, again, the year-end conference call a few months ago, we talked about the aspiration of getting A&P as a percentage of sales back to where it used to be. Clearly, A&P was significantly reduced in H2 of last financial year. Do you think that will largely recover in H2 of this financial year?
Okay, thank you very much. I'll start with your first question on cost discipline. We are obviously still implementing a very strict cost discipline everywhere in the group with the same guidelines that we are putting in place quite quickly at the end of Q3 last year, meaning this full travel ban, recruitment freeze, salary freeze, and very strict discipline in term of spending, I would say. What we want to do is obviously to keep this strict cost discipline, but as well have the agility to really adjust our resources. My comments is valid for both, I would say, structural cost and A&P. I'll come back to your question on A&P in a minute. To really adapt to the evolution of the situation depending on the market.
We strongly believe that this year is going to be a mix of very contrasted situation depending on the market. It's already true in this first quarter with U.S. and China in both. We want to have that agility to really adapt our resource allocation depending on the situation in every market, I would say. That's what you should expect for the year. Moving to the A&P question. Obviously, there was some very strong control and cut of the A&P we saw last year to adapt to the environment, meaning this, let's say, almost global confinement in many geographies, where obviously that context, the need to activate our brands was not there anymore.
We are now moving to what we call the purpose-based investment, meaning that we have a very systematic prioritization of the investment behind our top priorities, because we really want as well to have that agility to strongly invest behind top priorities, but being able, obviously, to keep a very strict control of our A&P depending on the situation of the market. That means that there will be this, again, specific approach depending on the market dynamics. We believe it's fair to assume an A&P, let's say, to net sales ratio around 16%, which is very close to what we used to spend pre-COVID, with this purpose-based approach and agility.
Thank you very much, Hélène.
[You're welcome].
All right, thank you. Your next question comes from the line of Richard Withagen from Kepler. Please ask your question.
Yes. Good morning, all. Thanks for the questions. First of all, on Jameson in the U.S., that has traditionally been very much an on-trade brand. Can you talk a bit about how you have activated that brand in the off-trade? Then the next question I have is on digital again. Have you seen a slowdown in e-commerce growth as markets opened up again after the lockdowns? On the investments in digital, in which regions will you invest the most behind e-commerce?
Okay. Thank you. Maybe I'll start with your first question on Jameson. It's true that this brand is probably more exposed to the on-trade than the split of the market between on and off in the U.S., and that's one of the most on-trade brands for us as well. Having said that, when you look at the recent trends of Jameson, this is strongly performing in the off-trade. When you look at the last recent years, Jameson is growing very strongly. The Irish whiskey category is holding well since March, and it's growing in line with the overall spirits market, and Jameson is growing in line with the category. When I look at the figures since March, it's +30% in Nielsen and +16% in the 52 weeks. A strong performance, I would say.
In term of activation, we've been quite agile to react to the confinement. For instance, we had some digital activation as soon as mid-March around St. Patrick, which was the beginning of the confinement in the U.S., to bring St. Patrick at home, if I remember well, the activation for Jameson. Which is really showing that agility we want to have to adapt to what's happening and to be obviously very much consumer-centric. Jameson has been performing well in this context of very strong resilience of the off-trade in the U.S. Your second question in term of e-commerce. Well, I would say, as I mentioned briefly earlier today, very consistent trend in e-commerce compared to last year. This is quite strong and accelerating. No change in the beginning of this fiscal year 2021.
In terms of market, the situation is quite different depending on the market for the e-commerce. As you know, this is for instance, a strong channel in China. We believe this is a key channel to increase our penetration in China, which is our key strategic priority. This is obviously a channel that we are leveraging to capture the opportunity behind that channel in that country. Situation can be very different from one brand to the other. For instance, it's probably already a double-digit weight in terms of sales for brands like Absolut, more single-digit for Martell.
We'll take our final two callers, please. Operator, if you could.
Okay, thank you. We do have still two more questions left. Your next question comes from the line of Chris Pitcher from Redburn. Please ask your question.
Good morning, Julia. Good morning, Hélène. Apologies if I missed the comment, Hélène, because it was a bit of a crackly line. Could you talk a bit about Martell in the U.S.? We're hearing very strong growth for cognac from most other providers, unless I've missed it, I don't think you've mentioned Martell in the United States. Also on the U.S., are you able to give us a scale for how much Cold Brew is up to now in terms of Jameson, whether you've been able to fully activate that as much as you'd hoped. Secondly, can we just have a bit of an update on potential regulatory barriers in India to a recovery, where we are in terms of state taxes, dry laws, and so forth, just to understand that over the next year if possible. Thank you.
Thank you. Maybe I'll start with your last question on India. Obviously it's a very difficult exercise to predict what can happen from a regulatory point of view. Well, I would say that, as you know, we've been facing quite some quite strong taxes at the end of the fiscal year 2020, that they are called Corona taxes, and that we are very significantly some upgrade. The regulation keeps moving. There are still some places where we still face those taxes, but the rate is going down. It's still very high in some states, like for instance, Andhra Pradesh. I would say on average, we are probably still facing corona taxes that are, I would say around 15%-20% depletion rate.
This is variable by state, as I mentioned, and it is better than at the end of June where we are probably talking about average taxes between 25%-30%. Back to your question on the U.S. Martell, in terms of category, you are very right by saying that the cognac category is in a strong dynamism. We are quite small on Martell in the U.S., so we have a very small basis. That is why I did not comment on the performance of Martell in the U.S. due to the size of the brand in the market. For Cold Brew, this is one of our fiscal year 2020 innovation. It is true that the timing of the launch was obviously impacted by COVID-19. We believe this is a great product that we are going to obviously strongly support in the months to come.
It's still quite small, but it's a very recent launch.
Thank you.
All right. Thank you. Your last question comes from the line of Pinar Ergun from Morgan Stanley. Please ask your question.
Good morning. Thank you. I have two questions, please. Firstly, could you please give us an update on your market share trends in your must-win markets? Second question, you highlighted challenging economic conditions. Do you anticipate any downtrading in any of your key countries going forward? Thank you.
Thank you. I'll start with your first question. In terms of market share, I would say that we've been commenting that our clear performance less than two months ago, and I think that was much more or less value data to refer to in terms of market share gain and stabilization for our top market. It would be too early to make any comments on where we stand. As I said, the performance was quite strong last year, and there's no reason to believe that there's any significant change. For your second question in terms of downtrading, it's true that in the current economic environment, that is a fair question. I would say when I look at our performance right now and the trend in our key markets, we don't see any downtrading so far. Probably on the contrary, I would say.
When you look at the U.S., as you know, it's got a quite strong trend in the off-trade of this, let's say, strong premiumization that happened quite fast after the first, I would say, days of impact of COVID-19. When you look at the most recent Nielsen, it's still very true. I'm referring to the figures, and you look at the performance of Standard is at + 10%, Premium + 22%, Super Premium + 40%, Ultra Premium +5 4%, and Prestige above + 70%. Definitely a strong premiumization there. In other markets, for instance, like India, in this first quarter, we have strong performance of our brands like Royal Stag and Blenders Pride, for example, which is as well a strong performance in terms of more premium brand, I would say, resisting strongly in the current context.
Thank you very much, Hélène. I think this brings our call to a close. Thank you very much, ladies and gentlemen, and have a good day.
Thank you all. Talk to you soon. Bye-bye.
Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.