Absolut maker up for grabs in Swedish shake up

By Neil Merrett

- Last updated on GMT

Related tags: Pernod ricard

Vin & Spirit (V&S), manufacturer of Absolut vodka, is up
for sale, following a vote yesterday by the Swedish
parliament to sell of some of the country's state-owned firms.

The sale of one of the world's largest vodka brands is already creating a buzz amongst rival distillers, which are keen to consolidate their presence within the growing premium spirits market. Absolut's volume sales rose by 7 per cent in 2006, largely due to a greater focus on the US market, according to V&S. With consumption for premium spirits brands undergoing strong growth in markets like the US, many firms have shown a strong desire to add premium vodka brands to their portfolio. In February, Constellation Brands announced it intended to buy the fast-growing Svedka vodka brand from Guillaume Cuvelier and Alcofinance for $384m. Svedka is one of the fastest growing vodka imports in the US, and increased volume sales by 60 per cent last year to 1.1m cases. This deal is likely to be dwarfed by a deal for Absolut though, with the sale expected to fetch around $5bn (€3.7bn) to $6bn (€4.4bn) in revenue for the Swedish government. Though the cost may appear excessive, there are thought to be a number of potential suitors in for the brand. Earlier this year, Pernod chairman Patrick Ricard emphasised he was interested in Absolut, claiming he would consider a move for the brand should the country's government decide to sell it. However, he is not expected to be alone in this desire, according to industry experts. David Hallam, an analyst with Evolution Securities​, told BeverageDaily.com earlier in the year that 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. 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.

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