just Five Years Ago: Bacardi takes a stake in Patron Spirits
Bacardi agreed a deal to take a stake in Patron five years ago this week
Five years ago this week, it emerged that Bacardi had agreed to acquire a minority stake in premium Tequila producer Patron Spirits.
As privately-owned groups, the Las Vegas-headquartered Patron and Bacardi did not reveal the size of the stake, merely describing it as “significant”.
The lead-up to the deal, however, was shrouded in controversy. Patron's co-founder Martin Crowley died in 2003 and, after his death, Bacardi claimed it had made an agreement with Crowley's executors to buy the unspecified stake in Patrón for US$175m. However, in 2007, the executors agreed that John Paul DeJoria, who co-founded Patron with Crowley, could acquire Crowley's 50% holding in Patrón's parent company, Caribbean Distillers Corporation, for $755m.
This led to Bacardi launching a lawsuit to block the move, based on its prior agreement with Crowley's executors. In July 2008, Bacardi got what it wanted.
So, what has Patron been up to in the intervening years?
Later in 2008, its then COO John McDonnell told just-drinks that the group had seen a 32.5% year-on-year sales rise in the US.
In 2009, the group revealed it had switched distributors in Mexico to its new friends, Bacardi, describing the country as one its most important markets. The following year, it emerged that Patron had secured a listing for its Tequila with British Airways.
In 2011, the company branched out to India through a new partnership with Mumbai-based Aspri Spirits.
Last October, McDonnell told just-drinks that Tequila was taking share from vodka in the travel retail sector, while in Asia, he said, wood-aged Tequila - such as Patron's Anejo and Reposado brands - was grabbing a slice of the whisk(e)y market.
McDonnell was then promoted to Patron's international president, as well as retaining the role of COO.
It was with some surprise, then, that the company announced in May this year that it had appointed a new international president, while failing to mention McDonnell. After enquries by just-drinks, it emerged that McDonnell had decided to quit the company for pastures new.
Being a private company, the group does not release sales figures, but according to its website Patrón Tequila “continues to set new sales records every year” and was “the first spirit brand in its price point category to sell 1m cases”. Patron's portfolio now consists of 12 premium Tequilas.
Bacardi notes on its website merely that it has a "stake" in Patron's parent company.
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