PERNOD-RICARD - URD 2020-21

____ 4. RISK MANAGEMENT RISK FACTORS

4. Product quality issues (1)

RISK IDENTIFICATION AND DESCRIPTION

POTENTIAL IMPACTS ON THE GROUP

The main product quality issues encountered within the Group arise from the level of quality and compliance of the: product ingredients; packaging; production process; and development process of our new products.

The success of the Group’s brands depends upon the positive image that consumers have of those brands. A quality issue with one of the products in the portfolio, affecting the integrity of its brand or its image among consumers, could have a negative impact on the Group’s sales.

RISK CONTROL ANDMITIGATION Quality risk management is based on a joint quality management approach implemented worldwide in all production affiliates. Coordinated by the Group’s Operations Department, this risk management policy is based on internal Pernod Ricard standards and on systematic risk analysis. It draws on the standards setting out best practices and minimum requirements in each of the areas concerned by quality: foreign bodies; contamination; traceability; quality control; and product recall. It is also backed up by an ambitious quality certification process for Group production sites based on the following two international standards:

ISO 9001 for quality management; and ISO 22000 for food safety management.

Note that this risk is also covered in Section 3.4.1.1 of the Non-Financial Information Statement. (1)

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PERNOD RICARD UNIVERSAL REGISTRATION DOCUMENT 2020-2021