Stoli Appoints New Distribution Partner
As we reported yesterday, SPI has put a series of rumors to rest by announcing its alliance with William Grant & Sons to distribute Stolichnaya in the United States.
SPI minority shareholder Andrey Skurikhin said the company is excited to work with William Grant & Sons, claiming it “has a wonderful portfolio and a proven track record with super premium spirits” and “has one of the fastest-growing spirits portfolios in the United States.”
Andrey also noted that Stoli had “many suitors” but that “William Grant & Sons is the best partner for us.”
Ever since Pernod announced its agreement to acquire Absolut from Vin & Sprit earlier this year, the industry has speculated where Stoli could end up. Prior to the Absolut acquisition, many believed Pernod would eventually acquire the full international rights to Stoli, but when it didn’t come to fruition it was apparent Pernod would no longer distribute Stoli in the U.S.
Pernod had marketed Stoli in the U.S. since 2005, when it acquired the rights to the Russian vodka brand as part of its purchase of Allied Domecq. However, ceo Patrick Ricard always said the company would either acquire Stoli or Absolut, and it ended up purchasing Absolut much to the surprise of many who considered Beam Global the frontrunner for the Swedish vodka.
In an interview this summer, Andrey told WSD that SPI was not interested in selling Stoli but was rather looking for new distribution partnerships in the U.S. Many in the industry initially thought Beam Global would make a good fit for Stoli since it lost the battle for Absolut earlier in the year. However, Fortune ceo Bruce Carbonari said in September that the company would not be involved with Stoli although it had held discussions with the SPI Group.
"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," he said.
Stoli averages about 2.2 million cases a year in the U.S. and roughly $500 million in retail sales, which certainly gives a new edge to William Grant & Sons. The company’s US president and North American managing director Simon Hunt agrees, saying, “We are extremely proud to enter into this agreement with SPI Group... We look forward to the partnership and to working closely with SPI Group to deliver continued and greater success for Stolichnaya."
A SNAPSHOT OF VIJAY MALLYA AND MORE DIAGEO RUMORS
India’s flashy tycoon Vijay Mallya has received a lot of press in the past couple days, with an especially interesting article coming from The Daily Mail. Journalist Karl West describes the wealthy executive, ceo of United Breweries, as looking like “an Indian Elvis Presley impersonator... Replete with chunky gold rings and bracelets, diamond studs in each ear, and sporting a pair of gold-framed shades.”
In our business he’s best known for last year’s £595million (US 1.18 billion) acquisition of Whyte & Mackay, which pushed UB to the third largest spirits group in the world behind Diageo and Pernod Ricard. Since purchasing the Scotch distiller, Vijay has been open about his intentions of premiumizing the company and positioning its brands to the luxury side of the business.
However, Vijay is an interesting individual on his own terms. As a father of three, he is “ranked 664 in Forbes magazine's list of the world's richest people, with an estimated net worth of £840million. He has 26 homes around the world, including a castle in Scotland and a fleet of 260 vintage cars,” according to the article.
Often time people compare Vijay to Richard Branson, which he “doesn't particularly like” but believes they have a similar passion for their respective brands.
He said one of the biggest lessons he learned from his dad was: “‘Count the money in the bank at the end of every day. And second, always keep control of the equity.’”
MORE DIAGEO RUMORS. Once again, the Economic Times is reporting that Diageo may buy a 14.99% stake in Vijay’s United Spirits (USL) without naming a source.
The stake may go for as much as $450 million to $500 million, the newspaper said. It cites Vijay in claiming that United Spirits and Diageo execs (led by Ivan Menezes) are in talks. Last month, however, United Spirits said it was meeting with more than one company for a possible alliance.
When contacted by the paper, Vijay confirmed: “There was a meeting with Diageo yesterday. We have entered into exclusive discussions with them for a limited period.”
The paper suggested that an exclusivity pact could mean Diageo beat out other potential bidders, such as Bacardi.
A $450-500 million stake would be about twice as much as the company’s value at yesterday's share price of 772.6 rupees. United Spirits has reportedly dropped 61% this year.
LIST OF PROS URGE UBS TO UPGRADE CONSTELLATION
UBS has upgraded Constellation’s shares to “buy” despite its decline of 52% over the past 2 months.
“We acknowledge the company’s risks,” said senior analyst Kaumil Gajrawala, “but believe they are largely priced in at current levels (using our below consensus estimates).”
In other words, UBS believes Constellation has room to improve but carries a well positioned portfolio. Positives for the company include: (1) easy comps, (2) trade down from the high end to the core of Constellation’s wine and spirits portfolios, and (3) productivity benefits gained from last year’s restructuring efforts.
Constellation’s focuses most heavily on its premium wine brands, which is where many former high-end wine drinkers are now shopping.
However, risks include: (1) exposure to the troubled UK wine market, (2) the potential acquisition of wine assets from UST/Fosters, (3) weak Corona/Crown trends, (4) impact from the shift to off-premise on recently-acquired Clos du Bois, and (5) high debt levels
The last part is especially interesting because UBS says Constellation could possibly acquire wine assets from UST or Foster’s despite its high debt levels. As the largest wine company in the world, Constellation has been touted as a contender for Foster’s but was believed to be hesitant due to its current high levels of debt. Perhaps it is willing to take a risk?
UBS also pointed out that Constellation is feeling some pain from the jewel of its portfolio, newly acquired Clos du Bois from Beam Global. In the four weeks to October 5, Clos du Bois fell -10.3% in value and -16.6% in volume, according to IRI data. In the 52-week period, Clos du Bois declined –3.2% in dollar sales and -7.2% in volume. Ouch. Wine overall is feeling a pinch from consumers shifting to the off-premise and we suppose Clos du Bois is no exception.
MI WHOLESALERS INTRODUCE BILL BARRING RETAIL-TO-CONSUMER SHIPPING
Once again retailers and wholesalers are battling things out in Michigan. As we reported yesterday, the state of Michigan is appealing a recent court decision that requires lawmakers to allow both in-state and out-of-state retailers to ship directly to residents. Several outcomes could result from the appeal, including a decision that would allow only in-state retailers to ship direct or a ruling that would bar all in-state and out-of-state retailers from shipping directly.
Today the Specialty Wine Retailers issued a press release claiming Michigan wholesalers are pushing legislation through the Michigan House of Representatives that would bar all wine retailers and grocers (in-state and out-of-state) from delivering wine to consumers.
“The ban on home delivery of wine outlined in HB 6644 would not only prohibit any deliveries by UPS and FED EX but would also ban delivery to customers in the stores' own delivery vehicles. The impact on Michigan wine retailers, groceries and their associated catering business would be significant,” said the group.
According to an article in Crain’s Detroit last week, Mike Lashbrook, president of the Michigan Beer and Wine Wholesalers Association’s, said his organization would certainly consider baring all retail shipments but was not working with any legislator to introduce a bill to level down.
“This is really a vital concern to the state of Michigan and the Liquor Control Commission,” he said in the article. “I think they will look at all options to try and preserve rational regulation,” he said.
Ken Wozniak of the Michigan Liquor Control Commission has also said the state appealed the court’s decision because the ruling "undermines" the Michigan Liquor Control Commission’s (MLCC) licensing system for retailers. However, director of the SWRA Tom Wark said “retailers would love to pay Michigan sales tax.”
SAM’S CLUB LAUNCHES NEW PRIVATE LABEL WINE
Wal-Mart’s Sam’s Club stores are offering a new private label wine brand with the launch of the chain's first Fair Trade Certified wine, Neu Direction, a 100% Malbec from Argentina. Neu Direction is one of the first wines to receive the Fair Trade certification in the U.S.
It is produced by Vina de la Solidaridad (vines of solidarity), a co-op representing 20 small farms, and Bodega Furlotti the winery. According to the company, the wine was recognized by the London Independent as the best Fair Trade Certified red wine in the world in February 2008.
So what are Fair Trade Certified programs exactly? Participating workers are guaranteed a fair price for their goods based on the cost of the living in their area that will fund the development of schools, medical clinics and other basic necessities. This process is administered in the U.S. by TransFair, a non-profit organization.
Neu Direction will sell for about $10 a bottle in more than 450 Sam's Club locations that are authorized to offer wine. Sam's Club also sells Fair Trade Certified coffee chain wide, and bananas, black tea and sugar in some clubs and roses online.
Until tomorrow, Megan
“They are ill discoverers that think there is no land, when they can see nothing but sea.”
Sir Francis Bacon
--------- Sell Day Calendar ----------
Today's Sell Day: 9
Sell days this month: 19
Sell days this month last year: 21
This month ends on a: Fri.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
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.
SPI minority shareholder Andrey Skurikhin said the company is excited to work with William Grant & Sons, claiming it “has a wonderful portfolio and a proven track record with super premium spirits” and “has one of the fastest-growing spirits portfolios in the United States.”
Andrey also noted that Stoli had “many suitors” but that “William Grant & Sons is the best partner for us.”
Ever since Pernod announced its agreement to acquire Absolut from Vin & Sprit earlier this year, the industry has speculated where Stoli could end up. Prior to the Absolut acquisition, many believed Pernod would eventually acquire the full international rights to Stoli, but when it didn’t come to fruition it was apparent Pernod would no longer distribute Stoli in the U.S.
Pernod had marketed Stoli in the U.S. since 2005, when it acquired the rights to the Russian vodka brand as part of its purchase of Allied Domecq. However, ceo Patrick Ricard always said the company would either acquire Stoli or Absolut, and it ended up purchasing Absolut much to the surprise of many who considered Beam Global the frontrunner for the Swedish vodka.
In an interview this summer, Andrey told WSD that SPI was not interested in selling Stoli but was rather looking for new distribution partnerships in the U.S. Many in the industry initially thought Beam Global would make a good fit for Stoli since it lost the battle for Absolut earlier in the year. However, Fortune ceo Bruce Carbonari said in September that the company would not be involved with Stoli although it had held discussions with the SPI Group.
"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," he said.
Stoli averages about 2.2 million cases a year in the U.S. and roughly $500 million in retail sales, which certainly gives a new edge to William Grant & Sons. The company’s US president and North American managing director Simon Hunt agrees, saying, “We are extremely proud to enter into this agreement with SPI Group... We look forward to the partnership and to working closely with SPI Group to deliver continued and greater success for Stolichnaya."
A SNAPSHOT OF VIJAY MALLYA AND MORE DIAGEO RUMORS
India’s flashy tycoon Vijay Mallya has received a lot of press in the past couple days, with an especially interesting article coming from The Daily Mail. Journalist Karl West describes the wealthy executive, ceo of United Breweries, as looking like “an Indian Elvis Presley impersonator... Replete with chunky gold rings and bracelets, diamond studs in each ear, and sporting a pair of gold-framed shades.”
In our business he’s best known for last year’s £595million (US 1.18 billion) acquisition of Whyte & Mackay, which pushed UB to the third largest spirits group in the world behind Diageo and Pernod Ricard. Since purchasing the Scotch distiller, Vijay has been open about his intentions of premiumizing the company and positioning its brands to the luxury side of the business.
However, Vijay is an interesting individual on his own terms. As a father of three, he is “ranked 664 in Forbes magazine's list of the world's richest people, with an estimated net worth of £840million. He has 26 homes around the world, including a castle in Scotland and a fleet of 260 vintage cars,” according to the article.
Often time people compare Vijay to Richard Branson, which he “doesn't particularly like” but believes they have a similar passion for their respective brands.
He said one of the biggest lessons he learned from his dad was: “‘Count the money in the bank at the end of every day. And second, always keep control of the equity.’”
MORE DIAGEO RUMORS. Once again, the Economic Times is reporting that Diageo may buy a 14.99% stake in Vijay’s United Spirits (USL) without naming a source.
The stake may go for as much as $450 million to $500 million, the newspaper said. It cites Vijay in claiming that United Spirits and Diageo execs (led by Ivan Menezes) are in talks. Last month, however, United Spirits said it was meeting with more than one company for a possible alliance.
When contacted by the paper, Vijay confirmed: “There was a meeting with Diageo yesterday. We have entered into exclusive discussions with them for a limited period.”
The paper suggested that an exclusivity pact could mean Diageo beat out other potential bidders, such as Bacardi.
A $450-500 million stake would be about twice as much as the company’s value at yesterday's share price of 772.6 rupees. United Spirits has reportedly dropped 61% this year.
LIST OF PROS URGE UBS TO UPGRADE CONSTELLATION
UBS has upgraded Constellation’s shares to “buy” despite its decline of 52% over the past 2 months.
“We acknowledge the company’s risks,” said senior analyst Kaumil Gajrawala, “but believe they are largely priced in at current levels (using our below consensus estimates).”
In other words, UBS believes Constellation has room to improve but carries a well positioned portfolio. Positives for the company include: (1) easy comps, (2) trade down from the high end to the core of Constellation’s wine and spirits portfolios, and (3) productivity benefits gained from last year’s restructuring efforts.
Constellation’s focuses most heavily on its premium wine brands, which is where many former high-end wine drinkers are now shopping.
However, risks include: (1) exposure to the troubled UK wine market, (2) the potential acquisition of wine assets from UST/Fosters, (3) weak Corona/Crown trends, (4) impact from the shift to off-premise on recently-acquired Clos du Bois, and (5) high debt levels
The last part is especially interesting because UBS says Constellation could possibly acquire wine assets from UST or Foster’s despite its high debt levels. As the largest wine company in the world, Constellation has been touted as a contender for Foster’s but was believed to be hesitant due to its current high levels of debt. Perhaps it is willing to take a risk?
UBS also pointed out that Constellation is feeling some pain from the jewel of its portfolio, newly acquired Clos du Bois from Beam Global. In the four weeks to October 5, Clos du Bois fell -10.3% in value and -16.6% in volume, according to IRI data. In the 52-week period, Clos du Bois declined –3.2% in dollar sales and -7.2% in volume. Ouch. Wine overall is feeling a pinch from consumers shifting to the off-premise and we suppose Clos du Bois is no exception.
MI WHOLESALERS INTRODUCE BILL BARRING RETAIL-TO-CONSUMER SHIPPING
Once again retailers and wholesalers are battling things out in Michigan. As we reported yesterday, the state of Michigan is appealing a recent court decision that requires lawmakers to allow both in-state and out-of-state retailers to ship directly to residents. Several outcomes could result from the appeal, including a decision that would allow only in-state retailers to ship direct or a ruling that would bar all in-state and out-of-state retailers from shipping directly.
Today the Specialty Wine Retailers issued a press release claiming Michigan wholesalers are pushing legislation through the Michigan House of Representatives that would bar all wine retailers and grocers (in-state and out-of-state) from delivering wine to consumers.
“The ban on home delivery of wine outlined in HB 6644 would not only prohibit any deliveries by UPS and FED EX but would also ban delivery to customers in the stores' own delivery vehicles. The impact on Michigan wine retailers, groceries and their associated catering business would be significant,” said the group.
According to an article in Crain’s Detroit last week, Mike Lashbrook, president of the Michigan Beer and Wine Wholesalers Association’s, said his organization would certainly consider baring all retail shipments but was not working with any legislator to introduce a bill to level down.
“This is really a vital concern to the state of Michigan and the Liquor Control Commission,” he said in the article. “I think they will look at all options to try and preserve rational regulation,” he said.
Ken Wozniak of the Michigan Liquor Control Commission has also said the state appealed the court’s decision because the ruling "undermines" the Michigan Liquor Control Commission’s (MLCC) licensing system for retailers. However, director of the SWRA Tom Wark said “retailers would love to pay Michigan sales tax.”
SAM’S CLUB LAUNCHES NEW PRIVATE LABEL WINE
Wal-Mart’s Sam’s Club stores are offering a new private label wine brand with the launch of the chain's first Fair Trade Certified wine, Neu Direction, a 100% Malbec from Argentina. Neu Direction is one of the first wines to receive the Fair Trade certification in the U.S.
It is produced by Vina de la Solidaridad (vines of solidarity), a co-op representing 20 small farms, and Bodega Furlotti the winery. According to the company, the wine was recognized by the London Independent as the best Fair Trade Certified red wine in the world in February 2008.
So what are Fair Trade Certified programs exactly? Participating workers are guaranteed a fair price for their goods based on the cost of the living in their area that will fund the development of schools, medical clinics and other basic necessities. This process is administered in the U.S. by TransFair, a non-profit organization.
Neu Direction will sell for about $10 a bottle in more than 450 Sam's Club locations that are authorized to offer wine. Sam's Club also sells Fair Trade Certified coffee chain wide, and bananas, black tea and sugar in some clubs and roses online.
Until tomorrow, Megan
“They are ill discoverers that think there is no land, when they can see nothing but sea.”
Sir Francis Bacon
--------- Sell Day Calendar ----------
Today's Sell Day: 9
Sell days this month: 19
Sell days this month last year: 21
This month ends on a: Fri.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
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 2:00 PM
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