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 chairman, president and CEO, spoke with Olly Wehring about CEDC's rapid rise to prominence and its plans for further expansion the Central and Eastern European region.

Central European Distribution Corporation (CEDC) may not have been a particularly familiar name within the industry a few years ago, and perhaps it's not the sort of name that would have stuck in the memory anyway. But a glance through the just-drinks archives reveals that CEDC has been very busy in Central and Eastern Europe of late.

Under CEO Bill Carey, CEDC has quickly become a force to be reckoned within Europe. Not only is the company the largest vodka producer and spirits distributor and importer in Poland, it is also the top alcoholic drinks distributor and importer in Hungary. Indeed, CEDC made quite a splash earlier this year, when it signed a letter of intent to acquire a majority stake in the top-selling premium vodka brand in Russia, Parliament.

Carey believes CEDC's experiences in the region position it perfectly to exploit any potential growth Central and Eastern Europe can offer up going forward. "Our initiative is to drive sales through markets where you see strong economic growth and premiumisation of the market, like Poland, Hungary - which has had a bit of a slowdown of its economy of late - Ukraine and Russia," he says.

"We feel Eastern Europe is where our know-how is. People say, why don't you invest in India or China? Maybe we should, but we're not as large as Pernod Ricard or other companies with larger infrastructures. For us, our biggest advantage is our local know-how of integrating acquisitions in Eastern Europe. We want to be the leader in Eastern Europe, where you have three of the top four biggest vodka countries in the world. We're not lacking in size or opportunity here."

Vodka has been around for centuries in pretty much all of the countries CEDC operates in. But Carey dismisses suggestions that the company will struggle to grow in countries where the vodka market is perceived as mature, to put it mildly. "It's the exact opposite," he says. "In Russia and Ukraine, in volume terms, you'd be correct. But that's led by a huge decline in the economy sector and an increase in mainstream, premium and super-premium markets. In value, the markets are very dynamic. Overall volume is falling because economy is such a large part of the market, but value-wise these markets are recording double-digit growth and we see that continuing on the back of strong economic trends."

Turning to the pending Parliament purchase, scheduled to close early next year, Carey is a firm believer in walking before one runs. "This is the first step towards further expansion for us," he says. "Parliament's a premium vodka, a one-brand company growing by about 20% a year, and we see this as a great stepping-stone for us to enter this market." But Carey doesn't want to stop there. "These markets have only just started a very rapid consolidation, and we'd like to be at the forefront of that," he continues. "We feel we know these markets, this is not just another opportunity for a multinational."

When CEDC acquired a 61% stake in Polish vodka producer Polmos Bialystok in 2005 - the company has since upped its stake further - it took control of the Zubrowka Bison Grass vodka brand. Zubrowka is a spirit brand that Carey believes can launch CEDC on a skyward trajectory on the export front. "We feel very optimistic about markets like the UK and US, which accounts for 50% of the premium vodka market, and we have just started there now," he says. "CEDC brands started selling in the US this month."

There can be no denying, however, that the vodka market in the US is nothing if not cluttered with contenders. However, Carey believes the brand has a strong USP. "Zubrowka's not a new brand," he says. "You have many start-up clear vodka brands in the US. We believe the brand gives enough positive attributes that give us enough of a formula for success in the US."

Carey believes those attributes give Zubrowka a clear edge over the numerous start-up brands that are hitting the US market. "There's one every week, and distributors hate it," he says. "Ours is not a new vodka, it's an extension from what we've done in Europe."

In Poland itself, meanwhile, CEDC has seen a sizeable chunk of its target audience leave the country, in search of greater riches in Western Europe, since the nation acceded to the European Union in 2004. "We were concerned, to be honest, when we read the statistics," Carey concedes. But Carey believes the flood has turned into a trickle now. "We've seen the net outflow finish now, with some coming back now. There's huge infrastructure construction going on in Poland, and they've got no workers. Short-term visa exceptions have been opened for people from countries like Ukraine - which is fine for us as these are vodka-consuming countries. I think we've been achieving these results in a worst-case scenario, due to population outflow."

The pending sale of Sweden's Vin & Sprit, owner of the Absolut brand, has kept vodka in the headlines for most of this year. While acquiring Absolut is out of CEDC's reach, Carey is still hoping for a slice of the V&S pie, in the shape of the Swedish company's ownership of the Luksusowa brand in Poland. The likelihood of CEDC getting control of Luksusowa, however, is dependent on which one of the big boys emerges triumphant with the ultimate prize.

"Obviously, our best choice would be Fortune to win, as we believe Fortune would not want to run a Polish distillery," says Carey. "We're also the importer of Fortune's Beam brands into Poland. We think they'd be the best ally for us. If it were Pernod, Bacardi or Diageo, they'd probably want to keep the distillery - this is dependent on if V&S is sold as a whole. If it's sold as one, we'd hope Fortune came out as the winner."

It would seem, then, that success for Fortune would help contribute to CEDC's growing fame (and fortune) in the global vodka sector.