Drinks groups step up investments

Related tags Stock market

Italian spirit maker Campari has today confirmed that it is
increasing its stake in US unit Skyy Spirits, while earlier in the
week it was the turn of brewer SABMiller to increase its stake in
Italy's Peroni group, writes Chris Jones.

Campari has acquired another 30 per cent stake in Skyy Spirits, exercising its right to the shares negotiated as part of its initial takeover of the company in January 2002. The cost of the acquisition was put at $156.6 million and takes Campari's total shareholding in the vodka maker to 89 per cent.

Skyy Spirits has been the main US subsidiary of the Campari Group since 2002, and is the owner of Skyy, one of the fastest-growing spirits brands in the world and a leading brand in the US super premium vodka market, one of the spirits sector's most dynamic segments.

The minority stake was bought from companies belonging to Maurice Kanbar, who founded Skyy Spirits in 1992 and who was controlling shareholder until January 2002.

Campari's chief executive Enzo Visone said that the acquisition reinforced Campari's commitment to growing its business in the US, "a crucial market in the group's international expansion strategy"​.

The remaining 11 per cent of Skyy Spirits is held by its management team, but Campari has an option to acquire these shares also, after 31 January 2007.

In the last five years, Skyy Vodka has doubled its sales volumes, selling approx. 2.2 million nine-litre cases in 2004 and growing at a compound annual growth rate (CAGR) of 17 per cent, according to Campari. The US vodka market is growing at around 3 per cent in volume and 5 per cent in value each year, according to market analysts Euromonitor​.

Meanwhile, brewer SABMiller has also increased its stake in Italian subsidiary Birra Peroni, acquiring another 39.8 per cent of the company and taking its total shareholding to 99.8 per cent. The company paid €162.5 million for the stake; the initial 60 per cent shareholding, acquired in June 2003, cost €246.0 million.

Like Campari, SABMiller was exercising an option negotiated at the time of its initial acquisition, although the original date for the additional investment was set at December 2006. However, SABMiller and the minority shareholders in Birra Peroni agreed to accelerate the share transfer process, giving the South African/US group almost complete control over one of its very few western European investments much earlier than planned.

Although SABMiller is a major international player, its strongholds are the US, Africa and eastern Europe, and the Peroni deal was its first significant investment in western Europe. Peroni holds a strong number two position (25.2 per cent share) in the growing Italian beer market, and has the leading standard brand (Peroni) and the number three premium beer (Nastro Azzuro).

Italy is a growing beer market, with a current estimated market size of around 17 million hl. Between 1996 and 2001, the market demonstrated a compound annual volume growth of 3.5 per cent, and an increase in per capita consumption of 21 per cent to 29 litres over the same period. Despite these increases, Italy's per capita consumption of beer is still amongst the lowest in Europe, where average annual consumption is nearer 80 litres.

Related topics Manufacturers

Related news