Pernod to Sell Plymouth Gin and Fris Vodka
Pernod said today it plans to sell the Plymouth Gin and Fris Vodka brands it won as part of its deal with V&S. Speaking in a press conference, Emmanuel Babeau, Pernod's deputy managing director in charge of finance, said the company aims to sell Plymouth Gin within 6 months of the deal closing, which Pernod expects this summer, according to a report in Reuters. He declined to discuss what Plymouth might sell for.
There may also be some regional brands that Pernod may seek to unload, but "the idea is really to keep V&S as it is," Babeau said.
Pernod also said it plans to keep Cruzan rum, another brand it will get from the V&S buyout.
In the past, Campari Group said it might consider buying brands that are sold off once V&S is purchased. Perhaps the Italian company is in the market for a premium gin?
PERNOD WILL “FULFILL” BEAM’S CONTRACT WITH ABSOLUT
In a press conference this morning, Alain Barbet, ceo of Pernod Ricard USA, said Pernod will honor the distribution contract between Beam Global and V&S, which ends in 2012. (Beam currently distributes Absolut in the U.S. through the Future Brands joint-venture). In other words, Pernod will not attempt to break the contract and pay a fine in order to start distributing Absolut sooner in the U.S.
"It is a clear contract we will fulfill," he said, "It cannot be a unilateral decision," according to a report by MarketWatch's William Spain.
Alain also commented that the acquisition was not about “vanity,” but a “well-considered strategic move.”
With regards to the price, Alain said Pernod paid “a very good price,” pointing out that Pernod paid a lower multiple then Diageo did for Ketel One or Bacardi did for Grey Goose.
Alain declined to comment on how long Pernod will continue distributing Stoli before giving up the distribution rights. As you recall, the company said it would continue pushing Stoli for a transitional time until SPI could find another distributor.
Pernod also remains upbeat amid a looming recession in the U.S., despite taking on debt to pay for Absolut. Alain said that while they are seeing a slowdown, premium brands continue to do well, particularly in the off-premise.
“We are not seeing a lot of the doom and gloom that other industries are right now,” he said.
MAXXIUM SAYS “BUSINESS AS USUAL”
Now that Pernod has snatched V&S, the Swedish drinks company will be the second to leave Maxxium after Remy Cointreau. (Recall that Maxxium is a global distribution company, jointly owned by Beam Global, Rémy Cointreau, The Edrington Group and Vin & Sprit). Maxxium issued an announcement yesterday saying everything is “business as usual” until the V&S sale is finalized and approved by regulatory authorities.
"Maxxium is proud to have supported the success of V&S, and especially the Absolut brand, to its current market value, through the exceptional growth we delivered for seven years in a row,” said Ben van Doesburgh, ceo of Maxxium. “Together with our shareholders, we will define the future beyond the eventual V&S exit to ensure Maxxium remains a superior builder of premium spirits and wine brands in the markets in which we operate.”
Maxxium also confirmed that Pernod “has stated its intention to exit Maxxium at the latest two years after the sale is completed, and it is our intention to work with them to ensure a smooth transition for all our customers.”
NINTH CIRCUIT DENIES COSTCO A RE-HEARING
In yet another victory for distributors, the three-judge panel of the Ninth Circuit Court of Appeals unanimously denied Costco's petition for a re-hearing. Recall that the panel ruled in January that most of the Washington state regulations challenged by Costco are constitutional, which basically overturned a lower court’s decision that favored the retailer. Costco argues that the regulations restrict competition.
The Ninth Circuit Court determined in January that it’s not really a federal court’s business to legislate from the bench. It acknowledged there may be other ways to conduct an orderly market and promote temperance, such as lower District Court Judge Pemchman’s suggestion of raising excise taxes, but it’s not for the judicial branch to decide.
That means the only recourse for Costco is to take it all the way to the US Supreme Court. Are they willing to take it that far? One can never be sure, but if it goes there, and the Supreme Court agrees to hear it, we'll again have more language on the future of the three-tier system.
The decision in this case creates an important precedent for future courts to consider. As you’ll recall, this is the second federal circuit court to rule favorably for wholesalers and regulators.
NBWA president Craig Purser said in a statement: "This decision is a great victory for the people of Washington State, and it upholds the right of states to set alcohol policy as their citizens see fit."
To read more about the Costco case, click here.
CONTROL STATES VOLUMES GROW 5.7%
Spirits volumes in control states grew 5.7% in February, based on NABCA data as reported by UBS analyst Melissa Earlam. Year on year comps were easy with +1.6% for Feb 2007. Furthermore, Feb 08 had one extra day this year which also fell on a Friday. Adjusting for this market volume growth would have been 2.1%, according to Melissa.
Diageo’s February volume growth fell below the market at +4.8%. It lost some volume share, notably in Scotch, vodka, rum cordials and tequila, which UBS believes could be related to price increases. Diageo saw strong growth in Canadian whiskey, gin and cocktails.
Pernod’s volume performance continued to be weak in February at +1%. It gained share in rum and Irish whiskey, but lost share in vodka, gin, Scotch and brandy/Cognac where it is de-emphasizing VS growth.
B-F grew 1.4%, while Campari grew 6.9% and Remy grew 5.9% y/y.
UBS put a buy rating on Diageo, Pernod, Brown-Forman and Campari
Until tomorrow, Megan
“I never think of the future - it comes soon enough.”
Albert Einstein
--------- Sell Day Calendar ----------
Today's Sell Day: 2
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.
There may also be some regional brands that Pernod may seek to unload, but "the idea is really to keep V&S as it is," Babeau said.
Pernod also said it plans to keep Cruzan rum, another brand it will get from the V&S buyout.
In the past, Campari Group said it might consider buying brands that are sold off once V&S is purchased. Perhaps the Italian company is in the market for a premium gin?
PERNOD WILL “FULFILL” BEAM’S CONTRACT WITH ABSOLUT
In a press conference this morning, Alain Barbet, ceo of Pernod Ricard USA, said Pernod will honor the distribution contract between Beam Global and V&S, which ends in 2012. (Beam currently distributes Absolut in the U.S. through the Future Brands joint-venture). In other words, Pernod will not attempt to break the contract and pay a fine in order to start distributing Absolut sooner in the U.S.
"It is a clear contract we will fulfill," he said, "It cannot be a unilateral decision," according to a report by MarketWatch's William Spain.
Alain also commented that the acquisition was not about “vanity,” but a “well-considered strategic move.”
With regards to the price, Alain said Pernod paid “a very good price,” pointing out that Pernod paid a lower multiple then Diageo did for Ketel One or Bacardi did for Grey Goose.
Alain declined to comment on how long Pernod will continue distributing Stoli before giving up the distribution rights. As you recall, the company said it would continue pushing Stoli for a transitional time until SPI could find another distributor.
Pernod also remains upbeat amid a looming recession in the U.S., despite taking on debt to pay for Absolut. Alain said that while they are seeing a slowdown, premium brands continue to do well, particularly in the off-premise.
“We are not seeing a lot of the doom and gloom that other industries are right now,” he said.
MAXXIUM SAYS “BUSINESS AS USUAL”
Now that Pernod has snatched V&S, the Swedish drinks company will be the second to leave Maxxium after Remy Cointreau. (Recall that Maxxium is a global distribution company, jointly owned by Beam Global, Rémy Cointreau, The Edrington Group and Vin & Sprit). Maxxium issued an announcement yesterday saying everything is “business as usual” until the V&S sale is finalized and approved by regulatory authorities.
"Maxxium is proud to have supported the success of V&S, and especially the Absolut brand, to its current market value, through the exceptional growth we delivered for seven years in a row,” said Ben van Doesburgh, ceo of Maxxium. “Together with our shareholders, we will define the future beyond the eventual V&S exit to ensure Maxxium remains a superior builder of premium spirits and wine brands in the markets in which we operate.”
Maxxium also confirmed that Pernod “has stated its intention to exit Maxxium at the latest two years after the sale is completed, and it is our intention to work with them to ensure a smooth transition for all our customers.”
NINTH CIRCUIT DENIES COSTCO A RE-HEARING
In yet another victory for distributors, the three-judge panel of the Ninth Circuit Court of Appeals unanimously denied Costco's petition for a re-hearing. Recall that the panel ruled in January that most of the Washington state regulations challenged by Costco are constitutional, which basically overturned a lower court’s decision that favored the retailer. Costco argues that the regulations restrict competition.
The Ninth Circuit Court determined in January that it’s not really a federal court’s business to legislate from the bench. It acknowledged there may be other ways to conduct an orderly market and promote temperance, such as lower District Court Judge Pemchman’s suggestion of raising excise taxes, but it’s not for the judicial branch to decide.
That means the only recourse for Costco is to take it all the way to the US Supreme Court. Are they willing to take it that far? One can never be sure, but if it goes there, and the Supreme Court agrees to hear it, we'll again have more language on the future of the three-tier system.
The decision in this case creates an important precedent for future courts to consider. As you’ll recall, this is the second federal circuit court to rule favorably for wholesalers and regulators.
NBWA president Craig Purser said in a statement: "This decision is a great victory for the people of Washington State, and it upholds the right of states to set alcohol policy as their citizens see fit."
To read more about the Costco case, click here.
CONTROL STATES VOLUMES GROW 5.7%
Spirits volumes in control states grew 5.7% in February, based on NABCA data as reported by UBS analyst Melissa Earlam. Year on year comps were easy with +1.6% for Feb 2007. Furthermore, Feb 08 had one extra day this year which also fell on a Friday. Adjusting for this market volume growth would have been 2.1%, according to Melissa.
Diageo’s February volume growth fell below the market at +4.8%. It lost some volume share, notably in Scotch, vodka, rum cordials and tequila, which UBS believes could be related to price increases. Diageo saw strong growth in Canadian whiskey, gin and cocktails.
Pernod’s volume performance continued to be weak in February at +1%. It gained share in rum and Irish whiskey, but lost share in vodka, gin, Scotch and brandy/Cognac where it is de-emphasizing VS growth.
B-F grew 1.4%, while Campari grew 6.9% and Remy grew 5.9% y/y.
UBS put a buy rating on Diageo, Pernod, Brown-Forman and Campari
Until tomorrow, Megan
“I never think of the future - it comes soon enough.”
Albert Einstein
--------- Sell Day Calendar ----------
Today's Sell Day: 2
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 11:57 AM
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