CZECH REPUBLIC: Pernod-Ricard loses Becherovka option
The Czech government has halted the privatisation of Jan Becher-Karlovka Becherovka (JBKB), reversing its 1997 decision to sell control of the nation's second largest spirit producer to the French group Pernod Ricard.
The abandoning of the distillery's privatisation could mean a new tender and a new owner for the government's remaining 59% stake. Pernod Ricard, through its SALB subsidiary already controls 30% of JBKB.
Until the government decides how it will sell its stake in the drinks company, the shares will remain held by the National Property Fund said government press spokesman Libor Roucek following a September 17 cabinet meeting. No mention was made about forcing Pernod Ricard personnel out of JBKB management.
It seems the CZK 1.324 billion () price tag for the 59% stake is not the issue. Alan Walden-Jones, chairman of JBKB and lead representative for Pernod Ricard in the Czech Republic said the French company was willing to pay the price.
But there have been disagreements over the Pernod Ricard demand that the government guarantee its purchase against claims by a local entrepreneur Zdenek Hoffmann that he had inherited the recipe and the right to make the famous herb liqueur, Becherovka - JBKB's leading brand.
Hoffmann surfaced with his alleged inheritance in 1998 and began production of his own Original Johann Becher in neighbouring Slovakia. Slovak authorities have been unwilling to issue an injunction against Hoffmann prior to a final ruling in the Czech Republic. And while JBKB has been awarded the trademark, there has not yet been a ruling on the authenticity of Hoffmann's inheritance.
"The reason for the government's decision was the fact that SALB was not willing to meet the terms of the privatisation agreement," Czech finance minister Jiri Rusnok said.
If a new tender is opened, the two likely names at the top of the list would be Pernod Ricard and market leader Stock Plzen, owned by the German Eckes. "We continue to say that we would be willing to take another look," said Stock managing director Martin Petrasek.
The initial privatisation of Jan Becher was a highly political affair. The winning bid was submitted by SALB, a joint venture between a local aristocrat/politician Karl Schwarzenburg, Patria Finance, and Pernod Ricard. The joint venture paid the state CZK 673m for a 30% stake, together with the option to purchase the states remaining 59% in 2001 after meeting certain trademark protection and production criteria.
The privatisation has remained a contentious issue ahead of next year's elections. A tabloid closely linked to former prime minister Vaclav Klaus has accused SALB of asset stripping and recommended that the privatisation be halted.
Last week Pernod-Ricard bought both Schwarzenburg and Patria Finance out of SALB, taking full control of the company
Strategic Review 2001 Pernod Ricard
As Pernod Ricard, Allied Domecq and Fortune Brands close in on the biggest drinks industry deal since the sale of Seagram, opinion about how the deal will be structured and who stands to win and lose ...
Maxxium Worldwide could come under pressure if Pernod and Fortune's Allied Domecq bid is successful, according to press reports today (14 April)....
It's been a quiet day on the Pernod/Allied Domecq front....
Conflicting reports circulated this weekend over whether Bacardi International is looking to form a counter-bid for Allied Domecq....
Todays press reports into Pernod and Fortune's hopes to buy Allied Domecq warn of possible conflicts and set a date for completion....
Pernod Ricard and Fortune Brands are considering a US$13 billion bid for Allied Domecq, the world's second-largest spirits company. Were it to take place, Pernod and Fortune would split Allied's brand...
Pernod Ricard and Fortune Brands are hoping to buy Allied Domecq for around 670p per share, according to press reports....
The US consumer goods group Fortune Brands has confirmed it is in talks about launching a joint bid with Pernod Ricard for Allied Domecq....
- Whatever happened to binge Britain? - comment
- How to turn a domestic spirit into a global brand
- The dangers of squaring up to your competitor
- The US beer market - A level playing field for all
- Remy Cointreau's Q2 and H1 - preview
- Sidney Frank CEO to head Clooney's import co
- Diageo sells off United Spirits' Bouvet Ladubay
- Captain Morgan distillation trial queried by USVI
- Irish whiskey brands could fail without bulk
- Sazerac sues Brown-Forman over Tennessee Fire
- Global Beer Trends 2015 : Global Beer Trends and Long-term Forecasts
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research
- Future growth opportunities for global spirits
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- Global Wine Market to 2019 - Market Size, Development, and Forecasts