SWEDEN: Absolut well-placed to brave credit crunch - V&S
The head of Vin & Sprit's spirits division has said that the current global economic uncertainty should not affect the unit in 2008.
Speaking to just-drinks today (31 January), Ketil Eriksen said that Vin & Sprit Absolut is well-placed to weather the turbulence affecting stock markets around the world.
"Historically, over the last 10-15 years we have not been impacted by these swings," Eriksen said. "Clearly, consumer spend will be impacted and most likely also the spirits category will be impacted to some extent.
"However, the premium end of vodka, we believe, won't be impacted too much. But that depends on how bad it's going to get. It's difficult to predict how serious this will be. We're watching it carefully, but historically we've done well during these kinds of periods."
Eriksen warned that, while the higher-priced spirits categories will not be affected, producers selling lower-priced alcohol are more likely to feel the pinch. "I think it's more lower-priced categories that are more sensitive to these swings," he said.
Earlier today, V&S Absolut posted a record year for its Absolut vodka brand. The division saw total sales in 2007 rise by 3% over 2006, with Absolut breaking the 5m nine-litre case barrier in the US for the first time.
When asked about the pending sale of V&S by the Swedish government, Eriksen said he was very happy that a time frame for the transaction is now in place.
"Hopefully this will be completed in the first half," he said. "We look forward to getting through the process because there is a risk that it takes attention from the business, specifically from a management point of view."
"I would prefer an owner that shares our optimistic outlook we have for the business," Eriksen added. "We are bullish about the future prospects for our business and we'd love to have an owner that shares that view."
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