Nov. 3 (Bloomberg) -- Pernod Ricard SA, the world’s second- largest liquor maker, said demand is “very lively” in China and India, while next year will remain “difficult” for champagne brands.

Sales in China returned to a “strong double-digit” pace after slowing around the Chinese New Year holiday in January, Chief Financial Officer Gilles Bogaert said in an interview at Pernod’s annual meeting in Paris yesterday. In India, where Pernod distills Royal Stag whiskey, “we didn’t see any impact of the crisis,” while Asian demand helped global duty-free sales return to growth in the past three months, he said.

Bogaert said the company’s more expensive Perrier-Jouet champagne brand, sold mainly in the U.S., will continue to suffer, while the cheaper Mumm bubbly faces discounts by competitors in its home French market. Sales in Europe continue to decline as consumers from Spain to Russia tighten their budgets, he said.

The maker of Beefeater gin and Ballantine’s whiskey said earlier that it expects operating profit from recurring operations to slow to a growth rate between 1 percent and 3 percent, down from last year’s 4 percent. Diageo Plc, Pernod’s larger competitor, forecasts a “long and slow” recovery in Europe and the U.S., Chief Executive Officer Paul Walsh said last week.

‘Reassuring’ Guidance

“Pernod’s guidance is reassuring,” Kepler Capital Markets analyst Laetitia Delaye said. “They tend to be prudent in their guidance to give themselves a margin of maneuver.”

Among other markets, Russian revenue continues to plunge, though local wholesalers are reporting that sales are falling at a slower pace, Bogaert said. Demand continued to grow in South American markets such as Venezuela and Mexico, he said, paced by a 16 percent gain for Absolut vodka in Brazil in the past quarter.

Pernod shareholders yesterday approved two board seats for the company’s second-largest shareholder, Belgian billionaire Albert Frere. They also approved a dividend of 50 cents per share and a free share for every 50 held.

China’s economy expanded 8.9 percent in the third quarter, the most growth in a year on stimulus spending and record lending growth. Retail sales gained 15.5 percent in September, the fastest pace since January. China’s retail sales growth had slowed to 11.6 percent in February, the weakest in two years, after peaking at 23.3 percent in July last year.

India, Asia’s third-largest economy, expanded 6.1 percent in the three months to June from a year earlier, the first acceleration since 2007.

To contact the reporter on this story: Ladka Bauerova in Paris at lbauerova@bloomberg.net.

Last Updated: November 2, 2009 23:55 EST