Harrison White
Managing Director of Pernod Ricard Cambodge, Mr. Daren Ong spoke with CIR Leader Talks about the world’s second-largest wines and spirits seller challenges and opportunities since entering the Cambodian market, setting benchmark industry standards and ensuring its commitment to responsible and sustainable business practices.
Launching the official affiliate in 2017, Pernod Ricard Cambodge most recently relocated to its new head office at Amass Central Tower, to accommodate the growth of employee numbers and business expansion.
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The Group now boasts 16 top international brands including, among others, Chivas Regal, Absolut Vodka, Royal Salute, Ricard pastis, Ballantine’s, Jameson Irish whiskey, Martell cognac, Havana Club rum, and Mumm and Perrier-Jouët champagnes.
Born in Singapore with in-depth overseas experiences of Taiwan, Vietnam & now in Cambodia, Daren Ong said the Group first decided to enter the Cambodian market based on strong economic growth and an expanding middle class over the last 20 years as well as the rapidly growing connectivity of the Kingdom to the rest of the world.
According to a 2016 Asia Foundation study Cambodian men drink an average of 9.7 liters of pure alcohol each year – far above the global average of 6.2 liters with the same study finding three companies account for 80% of alcohol produced and consumed in Cambodia.
“We believe it was time for us to be a part of Cambodia’s expanding and dynamic economy. Cambodia as a nation has made great progress over the past decades, the market has grown tremendously, and Cambodian consumers are expanding their knowledge and appetite for premium products,” Daren Ong said.
“We would like Pernod Ricard brands to be at the forefront of this growth. We are in a great position to contribute to the Kingdom’s future development, as a registered business entity and responsible tax contributor in the Kingdom,” he added.
Setting the Bar for Wine and Spirit Importers
In only a few short years Pernod Ricard Cambodge has already set itself apart from other international wine and spirit importers in Cambodia through its consumer centric approach to the market and absolute dedication to ensuring 100% authentication for each brand under its portfolio.
Daren Ong, who is also currently the Chair of EuroCham’s Fast Moving Consumer Goods (FMCG) Committee which has been recently merged from FMCG and Beer, Wine & Spirit Committee, emphasized that ensuring the Group’s brands were being legally imported and sold responsibly to consumers was their top priority.
According to World Health Organization by 2025 the ASEAN region is predicted to have the highest consumption rate of unrecorded alcohol in the world, and in Cambodia, almost half (46.8 percent) of consumed alcohol is unrecorded.
“Pernod Ricard Cambodge has been working tirelessly with the relevant authorities to ensure that all our brands are being 100% legally imported and have taken steps such as anti-counterfeit stickers across all our products for consumers to self-check,” he said.
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“We run these programs in conjunction with ensuring the proper regulation of our products as illicit alcohol are from unknown sources, causing doubts on the quality, endangering the lives of consumers. In addition, the Kingdom of Cambodia loses out on official tax revenues and costs the global economy $8.9 billion in fiscal revenue each year according to the same WHO report,” he added.
Incorporating a Message of Responsibility
Another key message from the only official brand affiliate since it entered the local market is it’s commitment towards responsible and sustainable business practices, including promoting responsible drinking – an obligation that has been difficult considering Cambodia’s absence of a Legal Purchase Age (LPA).
“Cambodia is one of the only countries in the region that doesn’t implement an LPA, a law that specifies the legal age when an individual can purchase an alcoholic beverage on- and off-premises. From our most recent multi-stakeholder dialogue we are advocating to explore the adoption of a Legal Purchase Age (LPA) at 18 years old in Cambodia, as Cambodians are legally responsible and allowed to make adult lifestyle choices, such as having a driving license and getting married,” Daren Ong said.
“The need to limit youth access to alcohol is important because of the harms associated with drinking at an early age and its long-term impact on a child’s development. The company also does not promote the common advertising ploy of reward schemes such as ring pulls that many local beer companies have, in which drinkers stand to win big-ticket prizes, and is also an effective, but yet negative, strategy to make people drink more,” he added.
Another project that Pernod Ricard Cambodge has been developing is its made-in-Cambodia rice spirit locally known as Sra Sor in Khmer and branded by Pernod Ricard as Sensota made from the rice paddy in Takeo province.
“The main purpose is to ensure that the traditional rice spirit enjoyed by Cambodians are of safe in quality and modern, so that this tradition continues on for ages. While we have not yet fully commercialized our specially made rice spirit product that is 100% Cambodian made, which is in line with the Cambodian government’s push to value-add agricultural products such as rice, we have been helping and training the rice farmers to value add their crops and therefore further enriching their livelihood and provide sustainability to their produces,” he said.
A Bright Future for Pernod Ricard in Cambodia
For Cambodia’s F&B industry, the last two years have been by far the most challenging with COVID-19 lockdowns and alcohol sale bans severely impacting revenue as well as limiting the ability of sales and marketing teams to effectively connect with all stakeholders, such as trade partners and consumers.
“The last two years were a challenge for every industry however one of the hardest hit was undoubtedly the Food & Beverage industries that respected the restrictions imposed to curb the spread of COVID-19, including a 5 months alcohol sales ban,” Daren Ong said.
However, he added that despite the current global economic challenges, Mr. Ong remains optimistic about the next few years for the alcohol industry adding that after the COVID-19 alcohol bans in 2021 the industry had bounced back strongly to pre-pandemic levels.
“Pernod Ricard Cambodge is confident that the alcohol industry in Cambodia had bounced back to pre-COVID levels this year, thanks to its strong domestic consumption as Cambodian values conviviality as part of their lifestyle. While we witness the strong growth of the country’s economy, we are very proud to be part of its development in a fully compliant and respectful manner for its local regulation and culture. It’s our responsibility to educate and responsibly promote our high-quality products to consumers, while further contribute to the economic growth of the Kingdom of Cambodia,” he added.
