US: Brown-Forman loses Glenmorangie distribution
Brown-Forman and LVMH Moet Hennessy Louis Vuitton have concluded the contracts through which Brown-Forman acts as the US importer of the Glenmorangie brands. The agreement includes Brown-Forman's distribution of Glenmorangie in Canada, Continental Europe, and certain Asian countries.
The contracts will conclude at the end of this month.
Brown-Forman has distributed Glenmorangie brands in the US since 1992 and served as marketing agent in Continental Europe and certain Asian markets since 2000. At that time, Brown-Forman purchased slightly less than 3m Class A shares in Glenmorangie plc for approximately US$15m. Late last year, Brown-Forman sold its shares in Glenmorangie plc to LVMH for $95.5m. Under long-term contracts with Glenmorangie plc, however, Brown-Forman continued to have distribution and marketing rights in those markets for several years to come.
In the new agreement announced yesterday (25 July), Brown-Forman has agreed to terminate those distribution and marketing rights in favour of LVMH, which purchased all the outstanding shares of Glenmorangie plc last year, in exchange for consideration.
"We are proud of the work done by both Brown-Forman and our distributor partners in building Glenmorangie in the US and key global markets into a premier single malt Scotch brand," said Paul Varga, president and chief executive officer of Brown-Forman Beverages. "However, we understand LVMH's desire to consolidate these excellent brands into their own distribution system."
Christophe Navarre, CEO of Moet Hennessy, said: "Brown Forman has been a very good partner for The Glenmorangie company over the years and the brands have prospered through this association. Now that Glenmorangie is part of Moet Hennessy it is natural that the brands should be distributed though our companies in all the markets where we operate."
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