Pot of Gould – Parliamentary questions
The US-based Eastern European drinks group CEDC has continued its rapid expansion with the acquisition of Russian vodka brand Parliament. While some observers have questioned the move, Patience Gould believes the acquisition will give CEDC the infrastructure to build its business in Russia, allowing it to replicate the successful business model it has employed in Poland.
Russia would appear to be centre stage in the international political arena at present, and has now become the main focus of attention in the drinks industry, with the acquisition of Russian vodka producer Parliament by the US/Polish drinks group Central European Distribution Corporation (CEDC). It would be fair to say that the deal has caused a few jaws to drop in amazement.
"I really take my hat off to Parliament for getting CEDC to buy them," said one commentator. "If I was them I would take the money and run."
Clearly the question "Why?" looms large. Parliament is not a big time player in Russia and its export success has been mainly in Germany, itself a relatively small vodka market - just 440,000 litres a year. Also, claims that it is the fastest-growing, and Russia's top-selling premium brand, have to be put into context.
Parliament's annual tally back in 2003 was in the order of 580,000 cases, and over the years it has grown steadily closing on 2.03m cases last year, a 37.2% increase on 2005. It's a handsome performance indeed but it's from a relatively small base.
According to a Nielsen survey, its total volume share of vodka in Russia stands at 1.85%, while its share of the "most prestigious segment of Russia's alcohol market Low Premium Vodka" (RUB240 (US$9.45) to RUB400 for a 1-litre bottle) is also 1.85%, ranking it 8th and 4th in those two respective leagues. So not hugely impressive, but clearly CEDC has other priorities than just snapping up a growing brand.
The company has always maintained that its future lies in Eastern Europe, to which this latest move bears witness. To begin with, the acquisition, the terms of which have not been disclosed, also includes various other production and distribution assets, as well as a 200-strong national sales force. This will give CEDC a good infrastructure for future development, and it has a highly successful template in Poland on which to build.
The US-based group is the leading vodka producer in Poland, as well as the number one drinks importer and distributor. Last year, it acquired the Bialystok Distillery, which included the renowned Bison Vodka Zubrowka brand. It also took over the Bols distillery, and in so doing gained the trade and marketing rights for the Bols brand, a shining star in the premium voddy sector, in both Poland and Russia. So these two brands could well be destined for future fame and fortune in Russia, while Zubrowka is about to be relaunched on to the world stage
Other vodkas in CEDC's Polish stable include Absolwent, the number one brand in Poland, and Soplica, the fastest-growing brand in Poland and one which is now making good headway in the UK. In short, CEDC is a vodka force with which to be reckoned.
It will be interesting to see what the company does with Parliament Vodka, and its super-premium option 999. Both brands enjoy strange USPs - Parliament is refined with milk, and 999 with diamonds.
As one observer put it: "Russia is a key market, and this acquisition affords CEDC the opportunity to launch other brands." But that said, a recent Euromonitor survey tracking vodka growth between 2004 and 2006 suggested the Russian market had declined by 11%, while Poland was up by 21% and the Ukraine by 11%. These are indeed interesting times - and then of course there's the Absolut question…
On the back of a raft of acquisitions, Central European Distribution Corporation (CEDC) has grown to become a major force in both the Polish and Hungarian spirits markets. Bill Carey, the company's ch...
The US-based Eastern European drinks group CEDC has continued its rapid expansion with the acquisition of Russian vodka brand Parliament. While some observers have questioned the move, Patience Gould ...
just-drinks wine pundit Chris Losh turns clairvoyant to predict the big stories of 2008. Will our Nostradamus of the Spittoon be proved right? There is only one way to find out. Keep reading just-drin...
Central European Distribution Corp. has plans to raise its full year 2008 net sales guidance in response to rising consumer demand for premium imported spirits and wines....
Pernod Ricard USA has introduced two new bottle sizes for its ultra-premium Stoli elit vodka brand....
French wine and spirits group Belvédère will list on the Warsaw Stock Exchange, its founder and director, Jacques Rouvroy, has told just-drinks....
Belvédère is poised to sell non-strategic assets totalling more than EUR100m (US$147.8m) this year in a bid to reduce debt levels....
- Cuba-US Normalisation: Bacardi, Pernod Winners?
- Review of the Year 2014 - Part IV: Spirits
- Coca-Cola to get boost from Monster in China
- CCE shows faith in Coca-Cola Life with full launch
- Sustainability in Wine - Part I
- Belvédère to sell assets, streamline portfolio
- Diageo welcomes verdict on Crown Royal "confusion"
- Bacardi, Pernod Ricard welcome US-Cuba deal
- United Spirits bids for distribution deal approval
- Gruppo Campari US unit head steps down
- Global vodka insights - market forecasts, product innovation and consumer trends research
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- The IWSR Forecast Report - 2014-2019 Global Review
- just-drinks on-trend: Craft beer - fortunes and future
- Global market review of non-Scotch whiskies – forecasts to 2018