V&S to take control of Luksusowa vodka brand

The sell-off of Poland's state-owned distilleries continued yesterday with the acquisition of the third-largest Polmos company, Polmos Zielona Gora, to Vin & Sprit, the Swedish company which is best known for the Absolut vodka brand.

V&S said it would pay PlZ129.2 million (€32.2m) for 85 per cent of Polmos Zielona Gora, with an option to buy the remaining 15 per cent if and when they become available.

Zielona Gora owns the brand rights to one of the few Polish vodkas which already has something of an international presence - Luksusowa - but it also owns several other local brands such as Polska, Pan Tadeusz, Gin Lubuski, Capri bitter and others, and operates a nation-wide sales organisation. The acquisition is expected to be finalised during the first half of the year, after approval by the Polish Minister of Internal Affairs and Administration.

Estimated sales at Polmos Zielona Gora in 2002 were around PlZ500 million, while volumes reached around 2 million cases, of which the vodka brands represented about 85 per cent.

"Polmos Zielona Gora is a good company with potential to be even better, both on the domestic market as well as internationally. I'm proud to welcome it in the V&S group. Poland is one of the world's most prominent vodka markets and this acquisition fits well into our growth strategy,"​ said Peter Lagerblad, CEO of V&S.

The negotiations with the Polish government have been lengthy - as indeed they have been for most of the other Polmos distilleries which have already been sold - and this is mostly due to Warsaw's insistence on obtaining assurances about future investment in the distilleries.

Helped by the substantial marketing expenditure behind brands such as Wyborowa, owned by Pernod Ricard which acquired the Polmos Poznan distillery - Polish vodkas are becoming increasingly popular on the world stage, and the Polish authorities are clearly keen not to undersell what is becoming an increasingly valuable asset.

But many of the distilleries have not been profitable for years, so the trick in the negotiations has been to get the best price for the future value of the asset without pricing the somewhat run-down distilleries out of the market.

As far as Polmos Zielona Gora is concerned, V&S has committed itself to a major development and investment programme, and has also agreed a social package with the local Polish unions.

V&S is the world's eighth largest drinks group, with, in addition to Absolut, brands such as Plymouth Gin, Danzka Vodka, Frïs Vodka and Aalborg Aquavit, as well as a number of strong regional brands. It is also the leading wine importer in Northern Europe.

The company already has a marketing presence in Poland, where Absolut has been sold since 1995 and where it has had its own marketing company, V&S Polska, since 2001.