Pernod Tests Banks with Loan
The 12 billion euro ($19 billion) loan for Pernod Ricard's acquisition of Vin & Sprit is set to test the company's banking relationships, sources told Reuters today. The loan is the largest non-investment grade corporate loan in Europe. As a result, many consider it a test by for European lending as money remains scarce.
Pernod will leverage its strong cash flow and consider selling some of its non-core brands or brands from V&S. Pernod has a strong borrowing track record and relationship banks are expected to support the deal.
"This is an off-market deal; it's not priced correctly, so it will hang on relationships, but it's clearly a company people want to do business with, as it's a good performer and they do business often," a banker told Reuters.
"This is the least risky deal Pernod has ever done; they're buying a successful brand, there is no overlap, and the distribution network is already in place," another banker said.
FRESH & EASY BREEZY IN THE U.S.
Tesco said it’s had a solid start with its new U.S. Fresh & Easy stores, despite critics who claimed the retailer was doomed. People especially thought Fresh & Easy was failing after Tesco halted the rollout of new stores last month. However, Tesco said it is “very encouraged by the start Fresh & Easy has made” in its earning statement.
"The response of customers to our offer has surpassed our expectations...sales are ahead of budget and sales densities are already higher than the US supermarket industry average, with our best stores exceeding $20 per square foot per week," said the company yesterday.
"We begin the new financial year confidently - with a good start in the UK, excellent progress in our established international markets and promising early performance from our investments in future growth, particularly in the United States, China and Turkey," said Tesco ceo Sir Terry Leahy.
PAUL WALSH BATTLES INDIAN LEVIES
Talks have reportedly heated up again between the Scotch Whisky industry and India. Diageo ceo Paul Walsh (and chairman of the Scotch Whisky Association) said that although progress towards a fair market was made last year, challenges remain, according to Just-Drinks. Recall that India abolished the additional duty on imported spirits, but individual states in the country have since introduced their own exorbitant taxes.
He warned that Indian states must “ensure the introduction of non-discriminatory tax treatment of domestic and imported products.” If they are unable to do so, he said the Association “will not hesitate to return to the WTO in the future to secure fair market access in line with international trade rules and standards.”
"Countries that are increasingly taking the benefits of a rapidly globalizing world on one hand, cannot look to protect their own domestic industries and markets on the other," he continued. Touché.
INDIA’S REBUTTAL. Just-Drinks is also reporting that Vijay Mallya, head of India’s UB Group, accused the Scotch Whisky Association of being a “paranoid organization.”
"We in India not only welcome the Scotch whisky industry, we acknowledge the Scotch whisky industry, and we wish to wholly co-operate with the Scotch whisky industry,” he said.
"If that were not the case, I would certainly not have invested GBP600m (US$1.17bn) in acquiring Whyte & Mackay."
LVMH WINE & SPIRITS DISAPPOINT
LVMH’s wine and spirits segment did not fair so well in the first quarter. U.S. sales fell
-15%, partly due to bigger than expected de-stocking by retailers and price increases. Executives were optimistic, however, saying they expect “much better figures” the rest of the year.
WSD BRIEFS:
CONSTELLATION WILL CUT 30 JOBS AT WIDMER’S WINE CELLARS in Naples, New York by the end of May. Most of the affected jobs are in production, but some are in the wine gift shop and tasting room. The lay-offs are a part of Constellation’s new initiative to premiumize its wine portfolio and off-load value and regional brands.
THE WHITE HOUSE WILL SERVE Sebastiani Vineyards and Winery’s rich, oak-aged 2005 Dutton Ranch Chardonnay at a dinner honoring Pope Benedict XVI’s first visit to the United States and his 81st birthday. The pope reportedly won't be able to attend the dinner, a Bavarian feast in honor of his German heritage.
THE DOLLAR FELL TO A RECORD LOW against the euro after European inflation accelerated in March. The dollar has dropped more than 13% in the past year amid the fallout from the collapse of the subprime housing market.
Until tomorrow, Megan
“A lie can travel halfway around the world while the truth is putting on its shoes.”
Mark Twain
--------- Sell Day Calendar ----------
Today's Sell Day: 13
Sell days this month: 22
Sell days this month last year: 21
This month ends on a: Wed.
This month last year ended on a: Mon.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
Pernod will leverage its strong cash flow and consider selling some of its non-core brands or brands from V&S. Pernod has a strong borrowing track record and relationship banks are expected to support the deal.
"This is an off-market deal; it's not priced correctly, so it will hang on relationships, but it's clearly a company people want to do business with, as it's a good performer and they do business often," a banker told Reuters.
"This is the least risky deal Pernod has ever done; they're buying a successful brand, there is no overlap, and the distribution network is already in place," another banker said.
FRESH & EASY BREEZY IN THE U.S.
Tesco said it’s had a solid start with its new U.S. Fresh & Easy stores, despite critics who claimed the retailer was doomed. People especially thought Fresh & Easy was failing after Tesco halted the rollout of new stores last month. However, Tesco said it is “very encouraged by the start Fresh & Easy has made” in its earning statement.
"The response of customers to our offer has surpassed our expectations...sales are ahead of budget and sales densities are already higher than the US supermarket industry average, with our best stores exceeding $20 per square foot per week," said the company yesterday.
"We begin the new financial year confidently - with a good start in the UK, excellent progress in our established international markets and promising early performance from our investments in future growth, particularly in the United States, China and Turkey," said Tesco ceo Sir Terry Leahy.
PAUL WALSH BATTLES INDIAN LEVIES
Talks have reportedly heated up again between the Scotch Whisky industry and India. Diageo ceo Paul Walsh (and chairman of the Scotch Whisky Association) said that although progress towards a fair market was made last year, challenges remain, according to Just-Drinks. Recall that India abolished the additional duty on imported spirits, but individual states in the country have since introduced their own exorbitant taxes.
He warned that Indian states must “ensure the introduction of non-discriminatory tax treatment of domestic and imported products.” If they are unable to do so, he said the Association “will not hesitate to return to the WTO in the future to secure fair market access in line with international trade rules and standards.”
"Countries that are increasingly taking the benefits of a rapidly globalizing world on one hand, cannot look to protect their own domestic industries and markets on the other," he continued. Touché.
INDIA’S REBUTTAL. Just-Drinks is also reporting that Vijay Mallya, head of India’s UB Group, accused the Scotch Whisky Association of being a “paranoid organization.”
"We in India not only welcome the Scotch whisky industry, we acknowledge the Scotch whisky industry, and we wish to wholly co-operate with the Scotch whisky industry,” he said.
"If that were not the case, I would certainly not have invested GBP600m (US$1.17bn) in acquiring Whyte & Mackay."
LVMH WINE & SPIRITS DISAPPOINT
LVMH’s wine and spirits segment did not fair so well in the first quarter. U.S. sales fell
-15%, partly due to bigger than expected de-stocking by retailers and price increases. Executives were optimistic, however, saying they expect “much better figures” the rest of the year.
WSD BRIEFS:
CONSTELLATION WILL CUT 30 JOBS AT WIDMER’S WINE CELLARS in Naples, New York by the end of May. Most of the affected jobs are in production, but some are in the wine gift shop and tasting room. The lay-offs are a part of Constellation’s new initiative to premiumize its wine portfolio and off-load value and regional brands.
THE WHITE HOUSE WILL SERVE Sebastiani Vineyards and Winery’s rich, oak-aged 2005 Dutton Ranch Chardonnay at a dinner honoring Pope Benedict XVI’s first visit to the United States and his 81st birthday. The pope reportedly won't be able to attend the dinner, a Bavarian feast in honor of his German heritage.
THE DOLLAR FELL TO A RECORD LOW against the euro after European inflation accelerated in March. The dollar has dropped more than 13% in the past year amid the fallout from the collapse of the subprime housing market.
Until tomorrow, Megan
“A lie can travel halfway around the world while the truth is putting on its shoes.”
Mark Twain
--------- Sell Day Calendar ----------
Today's Sell Day: 13
Sell days this month: 22
Sell days this month last year: 21
This month ends on a: Wed.
This month last year ended on a: Mon.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 2:09 PM
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