French spirits group Pernod Ricard is exploring a merger with Brown-Forman to strengthen its premium whiskey portfolio, while competitor Diageo faces challenges in the declining luxury spirits market.

Pernod Ricard is pursuing a potential merger with Brown-Forman to acquire premium whiskeys like Jack Daniel's, while Diageo's new CEO Dave Lewis focuses on brand disposals and price adjustments amid declining luxury spirits demand in North America where sales dropped 2% to $36 billion last year.