Southern/Odom Purchase McClaskey’s Wine & Spirits
Several readers have alerted us that McClaskey’s Wine and Spirits, the third largest wine distributor in Oregon, was swallowed by the new Odom/Southern partnership. We hear that Odom/Southern will be paying full market value plus assets to the McClaskey family, although financial details were not disclosed.
Most McClaskey brands (Delicato, Precept, and DS&S) should be making the transfer, including Diageo (which comes from Mt. Hood Beverage Co.) and Gallo Brands (which also comes from the old Mt. Hood Beverage company), according to our sources.
Oregon has seen a lot of consolidation recently, and the purchase of McClaskey’s is just the latest. Based in Portland, it was the last large wholesaler left standing in the mergers and acquisitions among big Oregon beer and wine wholesalers, according to an article in The Oregonian.
Southern entered Oregon in September by forming a joint-venture with Washington-based Odom Corp., which is strong in Alaska and eastern Washington. The j-v was made largely in answer to the June acquisition of Oregon's second-largest distributor, Mt. Hood Beverage Co., by the state's largest distributor, Young's Columbia Wine Co., which put the world's three biggest wine producers -- Constellation Brands, Diageo and E. & J. Gallo -- under the same distributor roof.
The target closing date is Friday October 3rd, our sources say. The Oregonian reports the acquisition is effective October 6 and the former McClaskey's Wine and Spirits will be renamed Northwest Select. It is owned 50% each by Southern and the Odom Corp.
McClaskey’s was a family owned business, around for 35 years. It was started by Mike and Donna McClaskey. This is just another example of consolidation in the wine and spirits industry. How long until there’s only a small handful of distributors? Send us your thoughts at megan@beernet.com.
A BIG YEAR FOR FORTUNE BRANDS
Earlier today we reported that Bruce Carbonari will succeed Norm Wesley as chairman and ceo, effective October 1. Norm announced his retirement after serving as chairman for 9 years and more than two decades with the company. Instead, he will remain on the board as a director. Norm said “this completes the leadership transition we began more than a year ago when we announced Bruce would become our ceo.”
It’s been a busy year for Fortune Brands, particularly on the alcohol side of its business. Shortly before Bruce took the helm as Fortune’s ceo in January 2008, Beam Global had recently sold its wine unit to Constellation Brands. Recall that the sale included brands such as Clos du Bois, Geyser Peak, Wild Horse, Buena Vista Carneros and Gary Farrell, as well as the associated vineyards, winemaking assets and sales organization. The purchase price was $885 million.
Fortune chose to sell its wine brands to focus more closely on spirits and raise money for Absolut, which at the time Fortune was considered the frontrunner. As the then ceo, Norm had remarked that “the wine industry is lower margin and more capital intensive than spirits, it's naturally a lower return segment relative to our spirits business.”
Fortune also sold the U.S. distribution rights for Dalmore Scotch to UB Group in late December 2007.
Bruce’s ceo appointment was announced in August and took effect January 2008. Perhaps the biggest change for Fortune occurred under his leadership when Pernod successfully acquired Absolut and surprised many who felt Fortune was a shoe-in. In March, the WSJ broke the news that Pernod won the auction for Vin & Sprit for $8.9 billion. Although many questioned whether Absolut was worth such a high price, Patrick Ricard told Reuters: “The brand is for sale when it's for sale. You buy it when it's for sale or you miss it.”
Fortune, on the other hand, determined the price was much too high. In a conference call in April, Bruce told investors he was “very comfortable with the outcome” and that “the Absolut deal wasn’t a must-have acquisition.”
Since then, Pernod has paid Fortune $230 million for early termination of its Future Brands joint-venture with V&S to distribute Absolut in the U.S. The joint distribution agreement had been scheduled to remain in place through February of 2012. Fortune also got a great deal in acquiring Cruzan Rum for $100 million from Pernod.
Under Pernod’s leadership, V&S is exiting the Maxxium j-v early (October 1), in addition to Remy leaving March 2009. As a result, the remaining two companies, Fortune and The Edrington Group, are forming their own alliance that is largely built on the existing Maxxium organization. The new Beam Global / Edrington alliance will launch on March 31 and will account for 90% of the current Beam Global/Edrington sales generated through Maxxium.
And as if Bruce didn’t have enough on his plate, Fortune is also working to build its own dedicated U.S. sales force. Bruce pointed out at the Bank of America Investment Conference earlier this month that the company has grown a lot in the last decade, and now it needs it own team to drive brands and no longer needs a distribution partner.
Many in the industry have speculated that Fortune will perhaps acquire Stoli Vodka now that Pernod is no longer in negotiations for the brand. However, Bruce said recently the company will not be involved with Stoli although it has held discussions with the SPI Group.
“As we continue to evaluate opportunities to create value -- both internally and externally -- we have concluded that we will not be involved in distributing Stolichnaya vodka," Carbonari said in a statement several weeks ago. "We did conduct discussions with SPI Group regarding the Stolichnaya brand. However, given the continuing uncertainty surrounding ownership of the brand and other risks unique to the situation, we did not see a reasonable solution that would serve the interests of our shareholders and we terminated those talks."
Many members of the media and analysts speculated that Fortune was the most likely candidate to acquire Stoli. However, in June SPI part-owner Andrey Skurikhin told WSD in an interview that Stoli was not currently for sale, and instead the company was looking for new distribution partnerships.
Lastly, how will Beam fair in the weakening U.S. economy? Click here to read what Bruce said last week.
CORBY DISTILLERIES TO DISTRIBUTE ABSOLUT IN CANADA
Corby Distilleries announced yesterday in a statement it has struck an agreement with Pernod to carry the exclusive right to represent Absolut in Canada, effective Oct. 1 for the next five years to September 30, 2013. As part of this agreement, Corby will also receive the exclusive right to represent Plymouth gin and Level vodka.
A NEW SOPRANOS WINE HITS SHELVES THIS FALL
The Sopranos has inspired a line of Italian wine that will launch nationwide this fall. Under a licensing agreement between HBO and New York-based Vesuvio Import Company, and distributed by Duggan’s Distillers Products Corporation, The Sopranos Italian Wines will hit stores beginning in September. The line includes a Chianti D.O.C.G., Pinot Grigio, and Pinot Noir priced between $9.99-$11.99. The launch will be supported by a multi-media national campaign spearheaded by New York-based Gotham Direct, Inc., in cooperation with HBO. The campaign will initially target the New York Metropolitan area and expand coast-to-coast throughout the fall and holiday season.
Until tomorrow, Megan
“The great tragedy of Science - the slaying of a beautiful hypothesis by an ugly fact.”
Thomas H. Huxley
--------- Sell Day Calendar ----------
Today’s Sell Day: 22
Sell days this month: 22
Sell days this month last year: 20
This month ends on a: Tues.
This month last year ended on a: Fri.
YTD sell days Over/Under: -1
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.
Most McClaskey brands (Delicato, Precept, and DS&S) should be making the transfer, including Diageo (which comes from Mt. Hood Beverage Co.) and Gallo Brands (which also comes from the old Mt. Hood Beverage company), according to our sources.
Oregon has seen a lot of consolidation recently, and the purchase of McClaskey’s is just the latest. Based in Portland, it was the last large wholesaler left standing in the mergers and acquisitions among big Oregon beer and wine wholesalers, according to an article in The Oregonian.
Southern entered Oregon in September by forming a joint-venture with Washington-based Odom Corp., which is strong in Alaska and eastern Washington. The j-v was made largely in answer to the June acquisition of Oregon's second-largest distributor, Mt. Hood Beverage Co., by the state's largest distributor, Young's Columbia Wine Co., which put the world's three biggest wine producers -- Constellation Brands, Diageo and E. & J. Gallo -- under the same distributor roof.
The target closing date is Friday October 3rd, our sources say. The Oregonian reports the acquisition is effective October 6 and the former McClaskey's Wine and Spirits will be renamed Northwest Select. It is owned 50% each by Southern and the Odom Corp.
McClaskey’s was a family owned business, around for 35 years. It was started by Mike and Donna McClaskey. This is just another example of consolidation in the wine and spirits industry. How long until there’s only a small handful of distributors? Send us your thoughts at megan@beernet.com.
A BIG YEAR FOR FORTUNE BRANDS
Earlier today we reported that Bruce Carbonari will succeed Norm Wesley as chairman and ceo, effective October 1. Norm announced his retirement after serving as chairman for 9 years and more than two decades with the company. Instead, he will remain on the board as a director. Norm said “this completes the leadership transition we began more than a year ago when we announced Bruce would become our ceo.”
It’s been a busy year for Fortune Brands, particularly on the alcohol side of its business. Shortly before Bruce took the helm as Fortune’s ceo in January 2008, Beam Global had recently sold its wine unit to Constellation Brands. Recall that the sale included brands such as Clos du Bois, Geyser Peak, Wild Horse, Buena Vista Carneros and Gary Farrell, as well as the associated vineyards, winemaking assets and sales organization. The purchase price was $885 million.
Fortune chose to sell its wine brands to focus more closely on spirits and raise money for Absolut, which at the time Fortune was considered the frontrunner. As the then ceo, Norm had remarked that “the wine industry is lower margin and more capital intensive than spirits, it's naturally a lower return segment relative to our spirits business.”
Fortune also sold the U.S. distribution rights for Dalmore Scotch to UB Group in late December 2007.
Bruce’s ceo appointment was announced in August and took effect January 2008. Perhaps the biggest change for Fortune occurred under his leadership when Pernod successfully acquired Absolut and surprised many who felt Fortune was a shoe-in. In March, the WSJ broke the news that Pernod won the auction for Vin & Sprit for $8.9 billion. Although many questioned whether Absolut was worth such a high price, Patrick Ricard told Reuters: “The brand is for sale when it's for sale. You buy it when it's for sale or you miss it.”
Fortune, on the other hand, determined the price was much too high. In a conference call in April, Bruce told investors he was “very comfortable with the outcome” and that “the Absolut deal wasn’t a must-have acquisition.”
Since then, Pernod has paid Fortune $230 million for early termination of its Future Brands joint-venture with V&S to distribute Absolut in the U.S. The joint distribution agreement had been scheduled to remain in place through February of 2012. Fortune also got a great deal in acquiring Cruzan Rum for $100 million from Pernod.
Under Pernod’s leadership, V&S is exiting the Maxxium j-v early (October 1), in addition to Remy leaving March 2009. As a result, the remaining two companies, Fortune and The Edrington Group, are forming their own alliance that is largely built on the existing Maxxium organization. The new Beam Global / Edrington alliance will launch on March 31 and will account for 90% of the current Beam Global/Edrington sales generated through Maxxium.
And as if Bruce didn’t have enough on his plate, Fortune is also working to build its own dedicated U.S. sales force. Bruce pointed out at the Bank of America Investment Conference earlier this month that the company has grown a lot in the last decade, and now it needs it own team to drive brands and no longer needs a distribution partner.
Many in the industry have speculated that Fortune will perhaps acquire Stoli Vodka now that Pernod is no longer in negotiations for the brand. However, Bruce said recently the company will not be involved with Stoli although it has held discussions with the SPI Group.
“As we continue to evaluate opportunities to create value -- both internally and externally -- we have concluded that we will not be involved in distributing Stolichnaya vodka," Carbonari said in a statement several weeks ago. "We did conduct discussions with SPI Group regarding the Stolichnaya brand. However, given the continuing uncertainty surrounding ownership of the brand and other risks unique to the situation, we did not see a reasonable solution that would serve the interests of our shareholders and we terminated those talks."
Many members of the media and analysts speculated that Fortune was the most likely candidate to acquire Stoli. However, in June SPI part-owner Andrey Skurikhin told WSD in an interview that Stoli was not currently for sale, and instead the company was looking for new distribution partnerships.
Lastly, how will Beam fair in the weakening U.S. economy? Click here to read what Bruce said last week.
CORBY DISTILLERIES TO DISTRIBUTE ABSOLUT IN CANADA
Corby Distilleries announced yesterday in a statement it has struck an agreement with Pernod to carry the exclusive right to represent Absolut in Canada, effective Oct. 1 for the next five years to September 30, 2013. As part of this agreement, Corby will also receive the exclusive right to represent Plymouth gin and Level vodka.
A NEW SOPRANOS WINE HITS SHELVES THIS FALL
The Sopranos has inspired a line of Italian wine that will launch nationwide this fall. Under a licensing agreement between HBO and New York-based Vesuvio Import Company, and distributed by Duggan’s Distillers Products Corporation, The Sopranos Italian Wines will hit stores beginning in September. The line includes a Chianti D.O.C.G., Pinot Grigio, and Pinot Noir priced between $9.99-$11.99. The launch will be supported by a multi-media national campaign spearheaded by New York-based Gotham Direct, Inc., in cooperation with HBO. The campaign will initially target the New York Metropolitan area and expand coast-to-coast throughout the fall and holiday season.
Until tomorrow, Megan
“The great tragedy of Science - the slaying of a beautiful hypothesis by an ugly fact.”
Thomas H. Huxley
--------- Sell Day Calendar ----------
Today’s Sell Day: 22
Sell days this month: 22
Sell days this month last year: 20
This month ends on a: Tues.
This month last year ended on a: Fri.
YTD sell days Over/Under: -1
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 10:35 AM
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