Absolut Sale Jacks Likely Price of Stoli

Posted by: David Kiley on April 2, 2008

stoli_logo.jpg

Pernod Ricard’s purchase of Absolut means it will divest itself of its distribution rights of Stolichnaya. Meantime, Fortune Brands, which has the U.S. marketing rights to Absolut through 2012, is likely going to get an offer from Pernod to buy out some of the years of that contract.

That leaves Stoli in the catbird seat, and the likely target of a bidding contest between Fortune and Bacardi, which lost out on the Absolut sweepstakes. Russian company SPI will soon have to negotiate a new deal for the international distribution rights for Stoli.

In that scenario, Bacardi would seem to have an upper-hand unless they divest the Absolut relationship first. The cash it could get from Pernod would bolster its offer to SPI, which is now grinning over the $9 billion sale of Absolut.

Reader Comments

Senior Lopez

April 8, 2008 11:10 PM

After ABSOLUT's ill conceived Mexican advertising campaign (in an Absolut world map showing western US as part of Mexico). I would bet that Fortune Brands couldn't dump Absolut fast enough and make sure that everyone in the US knows that they are not the distributor of Absolut vodka. I for one will be boycotting all of Ricard Pernod brands.

kb

April 10, 2008 8:25 AM

I don't believe that the ad campaign was the fault of Ricard Pernod. I do believe, however, that the $9B price RP has agreed to pay is now well above market value. It seems that Bacardi may have benefitted by not holding a ticket in the sweepstakes, and may have the upper hand regarding distribution of Stolichnaya. Which is good for me.

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News, opinions, inflammatory meanderings and occasional ravings about the world of advertising, marketing and media. By marketing editor Burt Helm, Innovation Editor Helen Walters, and senior correspondent Michael Arndt.

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