Pernod Ricard sells Agros unit to focus on drinks

- Last updated on GMT

Related tags: Pernod ricard, Trademark, Patrick ricard

With the sale of the Agros Fortuna fruit juice and canned food
business, Pernod Ricard's Polish business is now 100 per cent
focused on drinks - which was the reason why Agros was acquired in
the first place.

When Pernod Ricard, the French wine and spirit group, bought the Polish trading company Agros Holding its primary interest was in the international vodka rights held by the company. But Agros also had an important food trading business, and Pernod has been steadily selling off this business as part of its strategy of focusing primarily on wine and spirits products.

The latest - and indeed final - Agros unit to be sold is Agros Fortuna, whose brands include Fortuna fruit juices, Lowicz jams and Krakus canned vegetables. In a statement, Pernod Ricard said it had sold the Agros Fortuna business to Entreprise Investors, an investment fund, for €54 million.

The Fortuna business posted sales of €140 million in 2001 and employs 1,500 people, all of whom will be retained by the new owners. All of Agros' food businesses have now been sold off, leaving Pernod's Polish business entirely focused on producing Wyborowa vodka for distribution in Poland and elsewhere and in distributing other Pernod Ricard brands to the Polish market.

Pernod's acquisition of Agros was a canny piece of business which undoubtedly helped it win the rights to Wyborowa, the leading Polish vodka on export markets. While the various Polmos distilleries throughout Poland produced a wide variety of brands, they only had the rights to distribute these on the local market. All the rights to market the vodkas on the international stage were held by Agros, and therefore Pernod Ricard.

When the Polish authorities decided to privatise the Polmos business, they quickly realised that without the international rights to the brands, Polmos was unlikely to attract much in the way of interest from foreign investors. As a result, they tried arbitrarily to assign the international rights as well, prompting a lengthy legal challenge from Pernod Ricard.

But the French group was not really interested in the rights to all the vodkas, since only Wyborowa, and to a lesser extent Zubrowka, had any major international business, and so it cleverly used its ownership of Agros and international rights to negotiate the acquisition of Polmos Poznan, the distillery which produced the Wyborowa brand. Once that deal was concluded in 2001, Pernod agreed to give back the international rights to the other brands, thus facilitating the sale of the other Polmos distilleries.

But the story did not end there. The Polish government recently announced that it was proposing to designate the word Wyborowa, which means premium in Polish, as a generic term which could be used by any vodka brand - a move which would of course have had serious implications for the Pernod brand. The French group complained about the arbitrary move, which it said ran rough shod over international trademark laws.

The government eventually rejected the proposal, a move which was welcomed by Yves Flaissier, chairman of Pernod's Wyborowa unit. "As Poland prepares to join the European Union, this outcome demonstrates its maturity as regards trademark protection and the safeguarding of foreign investments. Our strategy aims to develop Wyborowa worldwide by stressing its authenticity as a genuine Polish vodka."

Pernod Ricard has now disposed of all its non-wine and spirit business, both in Poland and elsewhere, and can settle down and concentrate on further integrating its share of the Seagram drinks business acquired jointly with Diageo. But it is unlikely to stop there. The group has a long history of strategic acquisitions, and there are still many opportunities for adding on strong local brands which can then be developed on the international stage, the core of Pernod's strategy.

One unexpected move might be into the premium beer market, at least according to Pernod Ricard's chairman, Patrick Ricard. In a recent interview with the Belgian newspaper De Morgen​ he said that the group would not rule out a move into the speciality and premium beer segment, where there is a considerable amount of growth at the moment, but that the mainstream beer market was already well served by a number of major players.

Related topics: R&D

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