GLOBAL: Majors tighten grip on global spirits sector - research

The world's largest spirits groups are continuing to increase their share of the global spirits market, a new report from Euromonitor International has found.

According to Euromonitor International's Passport report, Growth for International Spirits Companies in Difficult Times, the top ten spirits producers increased their share of the global spirits market in 2011 to 26%, driven both by organic growth and acquisition.

However, the report states that, while international spirits companies have greater potential to expand, they were seeing "mixed results" in growth terms. Companies performing strongest were those with the broadest geographic and category spread, it says. Moreover, strength in emerging markets was not necessarily key.

"Geographic breadth is more important than whether the market is a mature or emerging one," the report says. "The key element is the remaining potential for growth in a particular market. There are still significant opportunities to grow organically in mature and emerging markets."

While the top ten have been pulling away from the pack, the report notes that the gap between the two largest players - Diageo and Pernod Ricard - and the others has also increased. It also notes that a new period of consolidation is beginning in the spirits sector.

In particular, Beam Inc is "vulnerable to takeover", with Pernod Ricard having most to gain from a move for the company, due to its relative weakness in North America and the fact that it would have fewer competition issues than Diageo in making such a move.

"Beam is likely to be the next big company that loses its independence," the report notes. "The company is publicly listed and, more importantly, is weakly positioned both in terms of geographic spread, as 86% of its volumes are sold in mature markets, and brand portfolio."