12, place des Etats-Unis Paris Cedex 16 - France Phone 33 (0) Fax 33 (0)

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1 12, place des Etats-Unis Paris Cedex 16 - France Phone 33 (0) Fax 33 (0) Charter

2 Culture

3 Pernod Ricard has an impressive track record of growth while always remaining true to its core values. This has been possible thanks to the strength of the Group s culture, which is distinctive and shared across the world. The aim of this Charter is to describe our culture together with our vision for the Group and our key organisational principles. We consider our collective adherence to these values and principles to be a real competitive advantage. We are thus proud to call ourselves Pernod Ricard, 'Créateurs de convivialité` Patrick Ricard Pierre Pringuet

4 Ambition Vision Mission AMBITION - VISION - MISSION

5 AMBITION VISION MISSION OUR AMBITION is to become the leader of the wine & spirits industry. We aim to do this by being the company that changes the rules and leads the industry s growth. OUR VISION is best summed up by the corporate signature: Créateurs de convivialité. This means: Every Pernod Ricard employee is encouraged to create and innovate with the aim of providing consumers with premium products and a convivial experience at every opportunity. Pernod Ricard seeks to bring people together and promote a sense of sharing, as well as direct, friendly contact framed by an awareness of individual responsibility. In this spirit, the Group encourages teamwork among its employees. OUR MISSIONS Are primarly to: Deliver value to shareholders by developing a long-term brand-building strategy. This value-based approach must ensure our share-price appreciates and shareholders receive a fair return. Provide a fulfilling role for employees, enabling them to develop their careers and rewarding them fairly. The Board of Directors and management believe that these principles can best be fulfilled by maintaining the Group s independence, in particular through the support of its family shareholders.

6 Business Model BUSINESS MODEL

7 BUSINESS MODEL The Pernod Ricard business model is first and foremost a culture that creates a common bond throughout the Group and underpins the achievement of all its goals. This culture is a genuine source of competitive advantage, setting Pernod Ricard apart from its rivals and driving its success. It is based on both a way of working - decentralisation - and a way of being - conviviality. Three core values (entrepreneurial spirit, mutual trust and sense of ethics) are at the basis of our model. Way of Working Decentralisation The Values Entrepreneurial Spirit Mutual Trust Sense of Ethics A collective commitment to performance Way of Being Conviviality The model is centred around: 1. A way of working: decentralisation 2. Three fundamental values: entrepreneurial spirit, mutual trust and a strong sense of ethics. 3. A way of being: conviviality A WAY OF WORKING: DECENTRALISATION Decentralisation underpins Pernod Ricard s structure, playing a central role in brand-building for the Group, profit-growth and employee-development. Pernod Ricard is committed to respecting the operational independence of its affiliates based on the principle of subsidiarity. This allows decision-making as close as possible to the market, enabling us to be respond faster to the needs of customers and consumers, regardless of the country concerned. Consequently, every affiliate is managed as a profit centre and has full responsibility for achieving the objectives it is set.

8 BUSINESS MODEL THREE FUNDAMENTAL VALUES : ENTREPRENEU- RIAL SPIRIT, MUTUAL TRUST AND A STRONG SENSE OF ETHICS 1. Entrepreneurial spirit is at the core of Pernod Ricard s identity. It is a key part of Pernod Ricard s management philosophy because of the Group s decentralised nature. Entrepreneurship means being able to make choices and take decisions. Managers are prized for their leadership and ability to embrace responsibility and take measured risks. Pernod Ricard in return understands that mistakes can be made, viewing them as part of fostering a spirit of initiative. 3. Sense of ethics: Pernod Ricard expects all its employees to have a strong sense of ethics, with respect and transparency as its watchwords. All employees are required to: Abide by the legislation in their market and by the Group s policies and procedures, Show themselves as honest and trustworthy by being sincere and open about their actions, Treat colleagues, shareholders, customers, consumers, suppliers and competitors with respect. Respect the environment, Comply with our industry commitments, Act as ambassadors for responsible drinking and behave impeccably in any professional situation. A WAY OF BEING: CONVIVIALITY Decentralisation and those three values acquire their full significance only when combined with a way of being: conviviality. This is what makes the Pernod Ricard culture unique. Pernod Ricard encourages straightforward, direct relationships across hierarchical boundaries to speed up decision-making. The Group promotes opportunities for its employees to mix with the aim of fostering the exchange of ideas and experience. To succeed, decentralisation relies on extensive networking among Group employees to strengthen collaboration and encourage the sharing of experience. This is also helped by the fact that many of our key managers have extensive and diverse experience within the Group. 2. Mutual trust is essential in a business model where operational decision-making takes place at an affiliate level, with multiple interactions between people and entities. Each level of management empowers its direct reports on the basis that they can be trusted to abide by the Pernod Ricard Charter. Employees can in turn trust their managers to support their initiatives and share responsibility with them. This is reflected in both long-term career management within Pernod Ricard and employees loyalty to the Group.

9 BUSINESS MODEL A UNIQUE CULTURE AS A COMPETITIVE ADVANTAGE There are many internal events that serve to spread, enrich and strengthen this culture within the Group. The foremost of these are the annual Les Embiez Conference, the Top Management Seminar and the Induction Seminar. The Pernod Ricard University plays a leading role in developing the Pernod Ricard culture. More than just a business school, it acts as an educational platform and melting pot for defining and spreading that culture. Its main aims are to: Introduce the Group to new employees, Disseminate the Pernod Ricard culture, Strengthen employees commitment, Develop leadership, managerial and technical skills, Foster networking within a function or region, Promote best-practice sharing, Recognise and celebrate success. The sense of belonging to a common culture in which all employees are entrepreneurs and ambassadors is key to the Group s success. It is managers responsibility to implement the Pernod Ricard Business Model and spread this culture across the Group. Leadership and people management LEADERSHIP AND MANAGEMENT

10 LEADERSHIP AND PEOPLE MANAGEMENT Pernod Ricard encourages to a participative style of management and relies on teams led by talented managers with strong leadership skills who inspire and motivate people. All managers are encouraged to develop a combination of six key competences which form the Pernod Ricard leadership model: Strategic Vision Entrepreneurship Overall Mindset Balancing high-level strategic thinking with pragmatic implementation and operational management EMPLOYEE DEVELOPMENT Identifying individual potential is a key concern for the Group, so Pernod Ricard has tasked itself with ensuring that each employee fulfils the role to which he or she is best suited, taking into account the Group s needs as well as the employee s skills and interests. This requires transparency and consistency in: Individual performance management Talent identification Career development To this end, the Group commits to: Providing every employee with honest feedback on performance and the career opportunities available, in particular during the annual review. Developing standardised procedures for consistently evaluating each employee s performance and career development. Results Orientation Live the Values People Development Team Management Core Focus Being a role model and delivering results in the Pernod Ricard way while continually adopting a creative approach to the business People Perspective Recognising and developing both individual talent and collective team abilities

11 LEADERSHIP AND PEOPLE MANAGEMENT DIVERSITY AND CAREER DEVELOPMENT Equality of opportunity and non-discrimination are the two principles underpinning the Group s recruitment and career development policies. In this spirit, Pernod Ricard is committed to developing multicultural teams of men and women with diverse experience and skills. The Group firmly believes this approach acts as a catalyst for better performance: sharing ideas and experience on a permanent basis enhances the ability to anticipate new trends, as well as driving innovation and creativity. This can be achieved by: Permanently embedding diversity into talent management. Bringing in people with a variety of backgrounds and experience helps create a stimulating work environment. Ensuring equal opportunities for all at the time recruitment or the chance of internal promotion, especially for those currently under-represented in key positions. Encouraging internal mobility (especially via I-Move) to increase diversity and encourage employees to gain experience around the Group. CEOs and management committee members are responsible for upholding these people-management and -development objectives as well as Pernod Ricard s values and culture. Corporate Social Responsibility implementation CSR IMPLEMENTATION

12 CORPORATE SOCIAL RESPONSIBILITY Pernod Ricard is convinced that its financial performance and social responsibilities are closely linked. The Group fully complies with the 10 principles of the United Nations Global Compact. At all times, Pernod Ricard seeks to balance economic efficiency with the welfare of society as a whole and the protection of the environment. From the outset, the Group has been deeply committed to corporate social responsibility, founding the Paul Ricard Oceanographic Institute in 1966 and IREB (which carries out research into the use of alcohol) in 1971, to name just two of many initiatives. The implementation of this policy is based on three fundamental principles that guide all Group CSR actions: There must be a direct link with our business, There must be consistency with our culture and identity, Our employees must be directly involved. The Group has defined four priorities as part of a platform: 1. Promoting the responsible consumption of alcohol the Group s foremost priority. 2. Respecting the environment and demonstrating commitment to sustainable development, linked to the Group s desire to preserve the unique places where most of our brands originate. 3. Encouraging dialogue between different cultures. 4. Fostering entrepreneurial spirit. The Group considers corporate social responsibility a major strategic matter. It is co-ordinated by a Managing Director and an advisory committee. There is a dedicated CSR Leader in each affiliate who ensures these commitments are factored into all of the Group s activities at every level. Our 18,000 employees are ambassadors involved in our social responsibility. Around the world we share responsibly and act sustainably

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14 Organisation

15 CORPORATE GOVERNANCE Corporate governance

16 CORPORATE GOVERNANCE Pernod Ricard s principles of corporate governance are defined by the Board of Directors. It appoints the CEO, who is responsible for managing the Group operationally and who, in turn, appoints the members of the Executive Board, delegating management responsibility to them in their respective disciplines. BOARD OF DIRECTORS The Board of Directors determines the Group s overall direction and ensures it is implemented. The CEO keeps the Board informed, and seeks any necessary approvals. The Board of Directors has four working committees: Audit Strategy Remuneration Nominations EXECUTIVE BOARD The Executive Board comprises the CEO, Group Managing Directors heading up the Group s four main areas of responsibility (the Distribution Network, Brands, Human Resources and Finance) and the Group General Counsel. It defines Group strategy and objectives and submits decisions to the Board of Directors when approval is required. It organises the Executive Committee s work and sets objectives for its members, in particular through the approval of the 4-Year Plan, the Budget and regular business reviews. EXECUTIVE COMMITTEE The Executive Committee comprises the Executive Board and CEOs of direct affiliates. It helps set the strategy and is responsible for the Group s smooth running. This forum is pivotal to relations between the Holding and direct affiliates. It participates in setting strategy and is responsible for overseeing the Group s business. In its monthly meetings, it: Reviews the Group s business. Actively participates in the setting of financial and business objectives (income statement, debt and qualitative objectives). Reviews brand and market strategies, assessing performance and debating any necessary organisational changes. Validates the Group s main policies and ensures they are applied.

17 OVERALL ORGANISATION Overall organisation

18 OVERALL ORGANISATION Pernod Ricard is a Brand Builder. This requires both long-term vision and implementation as close as possible to the consumer, which is what the Group s decentralised structure allows based on the dichotomy between: Brand companies charged with devising strategy for brands and categories, Market companies charged with developing the Group s international brands while managing regional and local brands. Market companies are grouped into Regions (and, where applicable, Clusters or groups of affiliates within a Region). This direct relationship between Brand company and Market company is the cornerstone of the organisation and is relevant for every market and brand, whatever the size. The golden rule is that development and implementation of brand strategies are the result of permanent dialogue between Brand companies and Market companies. Interaction between Group entities: Brand companies HOLDING Regions Market companies Pernod Ricard markets its brand portfolio through its own affiliates. Brand companies are expected to use the Group s distribution network. Exceptionally, and with the Holding s approval, certain Group brands may be distributed by third parties and third-party brands by Pernod Ricard.

19 OVERALL ORGANISATION Pernod Ricard s organisational model instils strong solidarity between Brand companies and Market companies, as they are jointly responsible for the outcome, profit being measured on a see-through basis. Brand companies must validate the local strategy implementation including volume projections and A&P budgets of their brands with each Market company. In the instance where Brand companies and Market companies cannot reach an agreement, the matter should be referred to the Region and if necessary to the Holding company. THE HOLDING COMPANY EMPOWERMENT As a general principle, Regions, Brand companies and Market companies are empowered to deliver their objectives according to the budget process. However, certain rules need to be applied, such as: Levels of financial authority. The need for all changes affecting a strategic brand s positioning, formula or packaging to be referred to, and validated by, the Holding company. The need for all significant HR decisions concerning an employee (e.g. internal mobility, salary increase, etc.) to be validated by at least two levels of management. INNOVATION The Holding company Innovation and creativity are central to the Group s development plans. They affect all areas of the business and all affiliates. They are also fostered by the continuous exchange of ideas among all Group entities. In this regard, decentralisation acts as a catalyst for collective intelligence. The expertise of the Pernod Ricard Research Center (CRPR) is freely available to all Group affiliates.

20 THE HOLDING COMPANY The Holding company defines Group strategy and oversees its implementation. It has four broadly defined areas of responsibility. RESERVED FUNCTIONS: Group strategy, Disposals and acquisitions, Group financial policy (including financing and tax policy) and financial communications, Corporate communications, Human resources (remuneration and benefit policies, careermanagement for senior executives etc.), Legal affairs, including litigation, key contracts and intellectual property, Public affairs and corporate social responsibility (CSR). MANAGEMENT OF DIRECT SUBSIDIARIES (Regions & Brand companies) Budget and 4-Year Plan approval. Reporting requirement for direct subsidiaries (limited to adequate level). Validation of major organisational changes. APPROVAL OF BRANDS AND MARKETS STRATEGIES Approval of key attributes for strategic brands (formula, packaging, brand identity and brand compass, advertising copy, new advertising campaigns and line extensions). Approval of regional or individual markets strategies. GROUP POLICIES AND BEST-PRACTICE SHARING This may evolve from simple coordination to resource sharing (in areas such as procurement, IT, QSE, ) and expertise support in marketing and commercial areas (such as consumer research, route to market, key account and category management or other areas).

21 Regions REGIONS

22 REGIONS Regions have operational responsibility for managing the Group s business in their respective geographic areas. They are empowered to ensure implementation of Group strategy and key policies and are accountable for business development as well as cash and profit generation in conjunction with Brand companies. Regions operate on two levels. AT REGIONAL LEVEL The Region: Defines priorities, optimises resource-allocation and seeks to enhance ways of working with Brand companies, Approves the strategy and key attributes of local and regional brands, Identifies and shares best practice. AT MARKET LEVEL The Region: Sets objectives and budgets for its affiliates and ensures their achievement, Oversees the implementation of brand strategies agreed between Brand and Market companies, Ensures the provision of an optimised sales structure to serve brands and Group strategy.

23 Market companies MARKET COMPANIES

24 MARKET COMPANIES Market companies are responsible for managing the Group s business in their local market. They report to the Region and are empowered to implement the Group s strategy and key policies, develop their business and deliver profit in the local market. They are managed as profit centres. Market companies key responsibilities are to: Implement the annual budget approved by the Region, Agree and implement brand strategy in conjunction with Brand companies, Allocate resources to maximise commercial performance, Manage and develop local brands, Implement and share best practice. CLUSTERS Clusters bring together several affiliates to pool their means, especially in support functions. They report to a Region and are flexible, capable of being formed, evolved or dismantled as needs dictate.

25 Brand companies BRAND COMPANIES

26 BRAND COMPANIES Brand companies are located in the country where their brands originate and are in charge of developing and implementing, in conjunction with Market companies, the strategy for the brands in their portfolio. They are accountable for the overall profitability (Contribution after Advertising & Promotion) of their brands. For each of their brands, their responsibilities cover: Production and the management of industrial assets in accord with the Group s Quality, Security and Environment strategy, Strategy including the brand platform ( brand compass ), positioning, advertising development, promotion and outline public-relations policy, Packaging development. New product development. Coordination with the Market companies to ensure that the global strategy is implemented (and adapted if necessary) to deliver an efficient local brand plan. To this end, Brand companies must work with Regions and Market companies to: Devise a four-year strategic plan for each of their brands and product categories that aims to maximise portfolio profitability, Define priorities and optimal resource-allocation. Lastly, in line with Group principles, Brand companies must submit for Holding- company approval any major changes to a strategic brand, such as those affecting product formulation, new products or advertising.

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28 Appendix

29 Appendix A ORGANISATION CHART

30 Appendix B HOUSE OF BRANDS A portfolio of premium brands 14 STRATEGICS SPIRITS AND CHAMPAGNE BRANDS 4 PRIORITY PREMIUM WINE BRANDS 18 KEY LOCAL BRANDS

31 Appendix C PERNOD RICARD CSR CHARTER AND IMPLEMENTATION Pernod Ricard views its Corporate Social Responsibility policy as the Group contribution to sustainable development. In our field of activity, this means reconciling economic efficiency with social fairness and the protection of the environment in a process of continuous improvement. As a result, Pernod Ricard has made a number of commitments: Build a relationship with our people based on loyalty and respect. => Develop, reward and engage our people, in line with ILO standards. Create economic value through our worldwide development. => For the shareholders, the employees, the communities and the society as a whole. Encourage suppliers and business partners to engage towards sustainable development. => Influence them to behave responsibly throughout the entire supply chain. Promote ethical marketing and responsible drinking and offering products of the highest quality. => Produce premium brands at certified sites, and promote them responsibly, in line with the Pernod Ricard Code for Commercial Communications. Conserve natural resources and protect the environment. => Develop a responsible use of natural resources, promote sustainable farming, implement an efficient environmental management system. Conserve natural resources and protect the environment: o Develop a responsible use of natural resources o Promote sustainable farming o Implement an efficient environmental management system o Favour responsible supply And on a case by case in two further domains: Develop cultural initiatives: o Disseminating our brands local culture and heritage o Sharing with our consumers art and culture of our local markets Favour entrepreneurship: o Partnership with NGOs on projects promoting entrepreneurship (fair trade, social business,...) External CSR activities must be developed to: Promote responsible drinking focusing on: o Don t drink and drive initiatives o Education, making young people aware of the potential risks linked to alcohol o Advocating moderation o Dissuading pregnant women from drinking o Making staff aware of their responsibilities

32 Appendix D CODE FOR COMMERCIAL COMMUNICATIONS All marketing initiatives and promotional activities should comply with the Pernod Ricard Code for Commercial Communications which is available on Pernod Ricard web site and Intranet. They should also observe both the letter and the spirit of all national applicable laws, regulations and self regulation practices. In countries where no regulatory measures exist, Pernod Ricard has decided to apply the same standards to ensure the socially responsible promotion of its products. The Internal Approval Panel for Commercial Communications oversees their compliance with self-regulatory measures that Pernod Ricard follows and applies to all of its subsidiaries. The Pernod Ricard Code includes specific provisions that make it a strict professional code : A message on moderation is required on all Group advertisements A pictogram informing pregnant women of the dangers of alcohol appears on all bottles in European Union countries No images representing any Group brand should appear at motor sports race tracks, on motorised sports vehicles, or on race partecipants clothing Obscenity and gratuitous nudity in advertising is strictly prohibited Appendix E COMPLIANCE MATTERS Competition Law Pernod Ricard is committed to the public policy goals of competition laws and to acting lawfully in the marketplace. It is the Group s policy to observe both the letter and the spirit of the competition laws in all countries where we do business. Wherever one is located in the world, competition laws will almost certainly apply to the way the Group conducts its business. Specifically, it is prohibited to fix selling or purchase prices with our competitors or any other terms on which we trade. It is not only an explicit agreement between competitors which will amount to price fixing, but also an informal co-ordination of price level increases and the exchange of price information. Similarly, agreements or understandings with competitors to divide up markets or territories are also illegal. The corporate and personal penalties for failure to adhere to competition rules are increasingly high. Pernod Ricard is responsible for informing its suppliers of the code and for ensuring its enforcement.

33 INTERNAL CONTROL OF COMMERCIAL COMMUNICATIONS PROCEDURE Mandatory for the 18 priority brands Design of the campaigns by the marketing teams and the communications agencies. Campaign submitted to the Internal Approval Panel by Brand companies and Market companies. < copy advice > submission Confidential advice Recommended for the 18 local brands Deliberations of the Panel given within maximum 7 days. The control scope: ADVERTISING INTERNET SPONSORSHIP Recommended if any doubt: PACKAGING PROMOTIONS Green assessment: approved without any restriction The panel assessment is formalised: summary form filled in for every commercial campaign. Amber assessment: approved subject to modifications Red assessment: rejected + must be re-submitted Reporting: A monthly report of the campaigns controlled is submitted to the Comex