GLOBAL: Pernod Ricard ordered to sell ahead of V&S purchase closure
The European Commission said today (18 July) that it has cleared Pernod's proposed purchase of V&S, conditional on the sale of a number of brands in markets where the Commission identified competition concerns.
Those concerns included the market for aniseed flavoured spirits in Finland, gin in Poland, vodka in Greece and Cognac, Port, Canadian whisky and gin in Sweden. "In light of these commitments, the Commission has concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it," the Commission said.
In the US, meanwhile, the Federal Trade Commission said yesterday that Pernod must end its distribution agreement for Stolichnaya vodka, as the current situation "would effectively combine the two most popular brands of "super-premium" vodka sold nationwide, Absolut and Stolichnaya".
Pernod, who has already said that it will end its distribution deal with Soyuzplodimport for Stolichnaya, will have to quit the arrangement within six months of acquiring V&S, the FTC said.
The FTC also noted that Pernod will assume V&S's role in Future Brands, the US distribution joint venture between V&S and Fortune Brands. "Fortune's subsidiary, Beam Global Spirits and Wine, owns brands that compete with Pernod brands in four markets - Cognac, domestic cordials, coffee liqueur, and popular gin," the FTC said. "Pernod's participation in the joint venture would give Pernod access to competitively sensitive information about the competing Beam Global brands. The consent order preserves the competition between Pernod and Beam Global by imposing firewalls to prevent Pernod from acquiring and using competitively sensitive information about the Beam Global brands."
Jeffrey Schmidt, director of the FTC's Bureau of Competition, said: "The proposed acquisition would have brought together the two leading suppliers of super-premium vodka, and raised concerns about the exchange of information in four other distilled spirits markets. The consent order, announced today, effectively addresses those concerns and ensures that the Absolut and Stolichnaya brands, and the Pernod and Beam Global brands, will continue to compete aggressively."
In March, Pernod pipped Beam Global's parent company, Fortune Brands, to win the auction for V&S. The French company will pay the Swedish state US$8.88bn for the company.
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