Drinks giants prepare for Absolut battle

By Chris Mercer

- Last updated on GMT

Related tags: Pernod ricard

A host of alcoholic drinks firms, including Bacardi, are believed
to be eyeing Swedish vodka brand Absolut, seen as a crown jewel in
the international spirits world.

The owner of Bacardi told the Financial Times​ newspaper he had written to the Swedish government to express interest in buying the state-owned alcohol firm, Vin & Sprit, which holds the Absolut brand. The news comes days after Sweden's government asked the country's parliament for approval to sell Vin & Sprit (V&S), alongside several other public companies. International interest in Absolut has been building for some time, in anticipation of the move. It is the world's second biggest vodka brand, only behind Smirnoff by sales, making it a highly coveted prize. David Hallam, an analyst with Evolution Securities​, told BeverageDaily.com​ most major drinks firms would likely be interested in Absolut. He said Bacardi appeared to fit "most neatly"​ but added that US companies "that don't have exposure in that particular product"​ may also stand a good chance. Brown-Forman and Fortune Brands could be two front-runners alongside Bacardi, and the latter already has a distribution agreement with V&S in the US. In Europe, Pernod Ricard has previously shown interest in Absolut, but would likely have to choose between this and its current international distribution rights to the rival Stolichnaya vodka brand. UK-based Diageo, the world's largest alcoholic drinks group, is thought to be ruled out due to its ownership of Smirnoff, Absolut's biggest competitor. The timescale of V&S' privatisation remained unclear at the end of last week, with the Swedish government insisting that it "does not say if, when or in which order the companies [proposed for privatisation] will be sold"​. Absolut increased volume sales by seven per cent in 2006, largely thanks to a greater focus on the US market, V&S said recently.

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