French spirits firm Pernod Ricard is savoring a taste of Sweden with its newly announced purchase of Vin & Sprit, the Swedish manufacturer of Absolut Vodka.
Pernod’s bid of $8.89 billion for the state-owned vodka maker beat out competing offers from Bacardi Ltd., Fortune Brand and a group of investors led by Sweden’s Wallenberg family.
Pernod’s brand portfolio includes marquee names such as Beefeater Gin, Chivas Regal whiskey and Mumm Champagne. Until now, the company had no vodka asset, although it does have a distribution deal with Russian vodka brand Stolichnaya. The acquisition will help Pernod stay competitive with British spirits conglomerate Diageo, which has a distribution partnership with Smirnoff Vodka, the current brand leader among vodkas.
Absolut is the fourth largest international spirit brand, behind Smirnoff, Bacardi Rum and Johnnie Walker scotch.
V&S also manufactures Plymouth Gin, Cruzan Rum and a number of smaller wines and aperitifs, but Absolut accounted for nearly half of the company’s $1.48 billion annual sales in 2006.
“We wanted to bolster our presence in the U.S. and Absolut, with its 5 million cases [in annual American sales], will definitely do that,” Pernod Ricard managing director Pierre Pringuet was quoted as saying Monday. “We intend to develop the brand and if possible accelerate its strengths.”
Both Pernod and the Swedish government told reporters that the vodka maker would retain Sweden as its home base.
“there is no written contract about that, but the value of the brand is because it is Swedish,” Pernod Ricard chairman Patrick Ricard said. “A Swedish brand must be produced in Sweden.”
Absolut recently launched a “Global Cooling” marketing campaign in the U.S. that publicizes the brand’s compliance with Sweden’s requirements on materials re-use, carbon replacement and sustainable agriculture.
Earlier this year the Swedish government announced its intention to sell the company and a number of other state-owned assets as measures to pay down the country’s national debt.
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