The owner of Absolut vodka and Martell cognac has blamed its decision to lift prices on spirits and wines in the UK on the need to offset the pound’s sharp slump.

Sterling has fallen by approximately 15% in the nine months since Britons voted in favour of leaving the European Union last June, leading Pernod Ricard to increase prices earlier this month by an unspecified amount.

According to Bloomberg, the group, the world’s second-largest spirits company after Britain-based Diageo, disclosed the price hike on Wednesday (29 March) in a series of slides that will be presented to investors during a call on the company’s European, Middle Eastern, Africa and Latin American businesses later in the day.

“Brexit is leading to a strong pound depreciation, with inflation expected higher as a reaction. In that context, Pernod Ricard increased prices in March,” the slides said.

In February, the company’s chief executive Alexandre Ricard warned profit margins in Britain would be unsustainable without price increases. Britain is a major market for Pernot Ricard, whose brands generate approximately 90% of total sales in the UK and the group has urged the government to secure a free-trade deal with the EU as quickly as possible.

Prime Minister Theresa May will trigger Article 50 to mark the formal beginning of Britain’s exit from the EU on Wednesday, amid growing concerns the lack of a bilateral deal with the UK could lead to a further increase in prices.

Data released last week by the Office for National Statistics, showed inflation rose 2.3% year-on-year last month, up from the 1.8% reading recorded in January and higher than the 2.1% figure analysts forecast.

The increase was the fastest on record since September 2013 and breached the Bank of England’s 2% target for the first time in three years.

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