Beer, Wine and Spirits. Tastings and Travel. News and Events. Classic Flavors from Breweries, Wineries and Distilleries Across the Drinks World.

Saturday, September 23, 2006

Who Will Buy A Round of Absolut?

With the election of a new center-right government in Sweden, a number of state owned businesses are likely to be sold and privatized. On of the most interesting is Vin & Spirit, which owns the Absolut brand.

Lehman Brothers is predicting the sale could happen in about a year. Others predict it could take longer in order to maximize the value of the company and the world's most recognizable vodka brand. It would certainly take a company with pretty substantial holdings to buy the brand, but several appear to be prepared to at least consider the opportunity.

Pernod Ricard, the French drinks giant, said it would be interested in examining the opportunity should the Swedish government put it on the market. Other possible owners could be Fortune Brands, which owns the Jim Beam Bourbon and Geyser Peak wine brands, Brown-Forman, the Louisville company best know for its strength in brown goods such as Jack Daniels and Diageo, although some analysts point out the company could face government hurdles over potential monopoly issues. One of the more intriguing potential suitors is Anheuser-Busch, which has stated its desire to grown its beverage business beyond beer and launched the Jekyll & Hyde liqueur brand earlier this year.

Why does it matter who controls the Absolut brand? Well, for one thing they will gain increased sales and marketing clout. The brand can help the parent company sell in new products and revenues can help fund additional new product development. Brands change hand in the drinks business on a regular basis, but it is rare when a marquis brand is available. This will be an interesting auction to watch.

1 comment:

Anonymous said...

FortuneBrands has the most significant stake (distributing Absolut in the US today). Losing those rights would be costly and would surely reposition the company as less than a leader in the distilled spirits market. The most likely scenario is a spin off of Fortune's Home & Hardware division to generate income to purchase V&S. If I were a betting man, my bets would be with Fortune!