Pernod Ricard Wins [Currency] 5.63bn Battle for Absolut Vodka
Moore, James, The Independent (London, England)
It is a drink whose time has come. Vodka is cheap to make, has no pesky maturing process and (as a result) lacks a strong flavour, meaning it can be mixed with any number of flavourings, or simply used as the base for any number of cocktails.
Its lack of a strong defining characteristic - Russia claims the tipple as its own but it has long been made throughout eastern and northern parts of Europe - has also made it perfect fodder for the marketing men who have produced a ple-thora of trendy "designer" brands that have tickled the taste buds of a generation of drinkers who have little inclination to make the effort required to get to know fine whisky or brandy.
And yesterday, the drink proved its rude health when Pernod Ricard stumped up $5.63bn (4.5bn) to buy Sweden's Absolut Vodka after a hotly contested auction.
In winning control of the Vin & Sprit Group - the owner of Absolut which is being privatised by the Swedish Government - Pernod beat off the favourite Fortune Brands, the American maker of Jim Beam, along with Bacardi and an investment group controlled by the Wallenberg family.
Pernod, whose portfolio of brands includes Jacob's Creek (wine), Chivas Regal (whisky), Mumm (champagne) and Beefeater (gin), said the deal made it "the co-leader in the global wine and spirits industry" with global spirits volumes of 91 million cases. However, that still puts it a shade behind Britain's Diageo, which has the No 1 brand, Smirnoff. Diageo pulled out of the auction several weeks ago, choosing instead to concentrate on the Dutch, family-owned, Ketel One, which it bought 50 per cent of for about 450m, saying it had better growth prospects.
But that didn't ruffle Patrick Ricard, Pernod's chairman and chief exec-utive, who hailed the deal as "a fantastic opportunity".
"Absolut is an exceptional brand. Its integration within our portfolio of premium brands, combined with the strength of our worldwide distribution network, paves the way for outstanding growth prospects," he said. …