SWEDEN: V&S bullish on future as speculation mounts
V&S Group has insisted it can do more to drive profits and boost the value of the business, the Swedish state-owned company said today (2 February).
The Absolut vodka producer is one of six state-owned companies that look likely to be sold by Sweden's new centre-right government. A number of drinks companies have been named as possible buyers of V&S, including Constellation Brands, Brown-Forman, Bacardi and Pernod Ricard.
Norwegian wine and spirits group Arcus, meanwhile, has confirmed it would be interested in the Nordic operations of V&S.
However, a V&S spokesman has told just-drinks the company believes that only now is it benefiting from its membership of global distribution network Maxxium and a similar venture for the US market, Future Brands.
The spokesman's comments came after V&S chief executive Bengt Baron told the Financial Times that the company is not yet "at its peak".
The spokesman said: "We only started acquiring companies in the late 1990s and we have not achieved all the synergies from them, for instance from our Nordic acquisitions. We can do more to streamline production and make the Nordic organisation even more profitable."
He said V&S believes that its international sales would continue to grow through the company's memberships of Maxxium and Future Brands.
"Up until 2001, Seagram distributed our products outside the Nordic region. When we entered into Maxxium and Future Brands, we became more involved in distribution. So from 2001 to 2005, we were learning how to work internationally. Now, that is paying off, which can be seen in the growing sales of Absolut, especially outside the US."
Sales of Absolut rose 7% last year and markets outside the US now account for over half of volumes.
It is the popularity of Absolut that has led to covetous glances from potential suitors. One rumoured admirer, Pernod Ricard yesterday refused to comment on reports that it has begun preparations on a bid.
However, it is unlikely those rumoured to be ready with a bid have made serious steps towards drawing up an offer when the Swedish government is unable to announce any privatisation until May at the earliest.
The V&S spokesman said the Government needed Parliament approval for a sale and that consent will only come after a vote in the Swedish legislature in May.
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