Could we be about to see a step-change in the global vodka category?

Could we be about to see a step-change in the global vodka category?

Well, look at what we might have here. Is this the beginning of the rise of the mega vodka corporation of the future?

Earlier today (5 March), SPI Group, which owns the Stolichnaya vodka brand, announced that it has held discussions about making a move for Central Eastern Distribution Corp, the US-based vodka firm that operates predominantly in Central and Eastern Europe.

Throw in the fact that CEDC, which is heavily burdened by debt, handed operational control to leading shareholder - and the owner of the Russian Standard vodka brand - Roustam Tariko earlier this year, and this whole situation looks, well, pretty vodka-tastic.

Oh, and with recent reports suggesting that Oaktree Capital is getting closer to selling off its Stocks Spirits division, and France's Belvedere Group may need to divest brands like Sobieski vodka in order to stay afloat, then it all gets a bit too much for speculators like me.

Surely, we aren't going to see these five team up and conquer the vodka world. Are we?

If we are, there may be some anti-trust hurdles to clear first, but not as many hurdles as one would think. According to figures from just-drinks and The IWSR's most recent global market review of vodka, CEDC is the second-largest vodka player globally – after Diageo – with around 5.8% total market share. And, much as it boasts of exporting its vodka brands – such as Zubrówka, Green Mark and Parliament – to 50 countries, its main markets are Poland and Russia.

SPI doesn't make the top ten globally, but its main markets are the US, Canada, Chile and the travel retail channel.

Russian Standard, meanwhile, has focused all of its efforts in recent years on breaking out of its domestic market to benefit from the so-called cocktail boom in the developed markets of the west, particularly Germany, the US and the UK.

Fourth-placed Stock Spirits derives most of its volume from three markets – Poland, the Czech Republic and Italy. Around 70% of total volumes for Stock comes from its vodka portfolio.

Finally, Belvedere has seen its volumes in Poland, the firm's largest market, struggle in recent years. The recruitment of actor Bruce Willis as brand ambassador for Sobieski - and subsequently a company shareholder – has helped drive rising sales in the US. Belvedere is on the skids, though, and an asset sale in the coming months is inevitable.

So, anti-trust may not be the issue that scuppers MegaVod (my idea – you can't have it). So, how about the consumer? Has he had enough of vodka, thereby making such a move less appealing?

While the spirit has been reaping rewards from the afore-mentioned cocktail boom for the best part of 20 years, opinion is split on whether the vodka bubble has burst or not. Have consumers moved on to other, newer spirits? Indeed, have they abandoned cocktails altogether, as their finances continue to be squeezed in the downturn?

Ask market-leader Diageo, and the answer to both of these questions is 'no'. At a vodka briefing in London late last year, the drinks giant said that, in 2011, it sold 34m cases of vodka, with the spirit accounting for 12% of its net sales value (NSV) in fiscal-2012, and 24% of NSV growth in the 12-month period.

This horse still has some distance left to run, it would appear.

The major fly in the ointment, I believe, lies in the personalities involved. Cast your mind back to 2006 (ah, such happy days) and you may remember Russian Standard slapping Stolichnaya's sales and marketing partner in the US, Pernod Ricard, with a lawsuit accusing it of  “false advertising” for the brand in the country.

It was Stolichnaya's perceived 'Russian-ness' – or alleged lack of it – that rankled with Russian Standard's owner. Was the bulk shipping to Latvia and bottling it there a step too far away from Stolichnaya's claim to be a genuine Russian vodka?

Much as the row was eventually settled, it still took four years for Roustam Tariko to let the matter lie. That animosity towards SPI is still alive and well, I've heard. Indeed, one observer described Tariko's feelings towards the Luxembourg-based firm as being “akin to a white fury”.

Would Tariko be prepared to swallow that down, in order to coax out MegaVod?