GLOBAL: Pernod Ricard remains open to brand sell-offs
Pernod Ricard has sold a raft of brands since acquiring Absolut vodka in 2008
Pernod Ricard has said that its spate of brand divestments in recent years is not part of a broader sell-off strategy but has admitted to owning a “long tail”of non-core brands.
Since acquiring Vin & Sprit, the owner of the Absolut vodka brand, in 2008, Pernod has offloaded a number of brands at the same time that it has looked to pay down the debt it took on to buy the Swedish firm. Most notably, the company sold the Wild Turkey Bourbon brand to Campari in 2009 for US$575m, while, a year ago, it divested the Danish aquavit brands Aalborg and Brøndums, German brand Malteserkreuz Aquavit and Danish bitter brand Gammel Dansk to Arcus-Gruppen for EUR103m (US$125.6m).
Speaking at a press briefing in London earlier today (3 September), deputy CEO & COO Alex Ricard, said that Pernod is pursuing an “ongoing cleaning-up” of its non-core brands, but noted that the company looks at sales only when the opportunity arrives.
“We have a long tail of non-core brands,” Ricard said. “On an opportunistic basis, if there are brands that are seen by our local teams as being non-core, then yes (we will sell them). Sometimes these kinds of opportunities crop up but sometimes, from a financial point of view, they don't make sense. It's sometimes more value-creating to milk the brands than to sell them at a low multiple.”
Regarding last year's divestments to Arcus, Ricard said: “There was a strategic rationale behind this. We wanted our sales and marketing teams in Scandinavia to specifically focus on our top 14 key strategic brands, which were driving the growth. It's part of our ongoing cleaning-up of the tail-brands in our portfolio.
“There's no divestment plan at a strategic level,” Ricard added. “The tail brands have their purpose, but if opportunities come up, we do consider sales.”
Click here for a list of Pernod's divestments between August 2008 and April 2009.
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