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SUSTAINABILITY & RESPONSIBILITY (S&R) PROTECTING THE PLANET

effluent from a distillery in Ireland which exceeded temperature ● limits for more than a month due to a fault in the cooling unit; a fire in Ireland, which was brought under control and had no major ● consequences. These events were the subject of analyses and action plans designed to remedy the consequences and to remove the cause, so as to avoid the problem happening again. Provisions for environmental risk 3.5.2.3 As of 30 June 2018, no provisions have been made for environmental risks. Some affiliates had to provide guarantees when applying for operating permits from the authorities. These do not correspond to specific amounts but ensure the affiliates’ solvency to deal with any consequences of pollution or any other environmental accident.

Pernod Ricard is committed to developing and promoting environmentally friendly farming practices, both through its own farming activities (mainly vineyards) and in the products it buys from its suppliers. As such, the Group acts in accordance with local standards with the following requirements: reducing the use of fertilisers; ● selecting and using crop protection products that are less hazardous ● to the environment; control of water consumption, in particular using drip irrigation ● techniques where possible; preservation of soil and biodiversity; ● training and assistance in sustainable agriculture practices provided ● for farmers. Sustainable agriculture and performance 3.5.3.2 of our vineyards The vineyards run directly by the Group cover 5,913 hectares in seven main countries: New Zealand (42%), Australia (23%), Argentina (13%), France (12%), Spain (5%), the United States (3%) and China (2%). The majority of these vineyards are subject to certification according to environmental standards (see table below), representing 95% of the land used by the Group. The objective for 2020 is to obtain environmental certifications for all our vineyards.

Promoting sustainable 3.5.3 agriculture Challenges and strategy 3.5.3.1

Pernod Ricard is a major partner in agriculture, sourcing all of its products from agricultural raw materials. The main agricultural raw materials used by the Group are grains for whiskies and vodkas, sugar cane for rums, and grapes for wines, Champagnes, cognacs and brandies. Then comes sugar beet for neutral alcohol used in various liqueurs, agave for tequilas, potatoes for some vodkas, and lesser quantities of numerous aromatic herbs and spices. During FY18, the raw materials used by the Group equated to 2,597,700 tonnes of agricultural products, representing both in-house production from our vineyards and farms (60,170 tonnes), direct purchases of raw agricultural products (584,010 tonnes), or purchases of processed products such as sugar and alcohol (equivalent to 1,953,520 tonnes of agricultural products). In farming terms, in FY18 this output represented the equivalent of around 260,490 hectares of crops, from Europe (grain, grapes), Asia (grain, aromatic plants), the Americas (sugar cane, grain, agave) and Oceania (grapes).

Country

Environmental standard

New Zealand

Sustainable Wine Growing New Zealand

Australia

Entwine Australia ISO 14001

Reims, France

ISO 14001/ Haute Valeur Environnementale (HVE/High Environmental Value)/Sustainable winegrowing standards in Champagne ISO 14001/BNIC (Cognac producers organisation) integrated viticulture principles California Sustainable Winegrowing Alliance (CSWA)

Cognac, France

United States

Spain

ISO 14001/Synergia

Argentina

ISO 14001

China ISO 14001 From FY13 to FY18, the number of synthetic crop protection products (fungicides, insecticides, herbicides) used per hectare was reduced by 54%. The total consumed was 36.9 tonnes of active ingredients for the entire Group. The following are examples of practices which can reduce the use of synthetic crop protection products: maintaining grass between vine rows instead of weeds; ● the use of pheromones to combat insects (sexual confusion); ● the use of mineral fungicides which are less hazardous to the ● environment (155 tonnes of sulphur and 5.7 tonnes of copper used in FY18).

Agricultural land corresponding to raw materials used (hectares)

Sugar beet 1,738

Potatoes 1,783

Sugar cane 10,209 Maize 21,552

ƌŽŵĂƟĐ ƉůĂŶƚƐ 401

Agave 290

Wheat 25,662

Various cereals 115,199

Malted cereals 35,892

Vines 47,768

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PERNOD RICARD REGISTRATION DOCUMENT 2017/2018