Blog: Bid for Stolichnaya, if you dare
Olly Wehring | 1 August 2008
So just what, exactly, is going on with Stolichnaya?
Word on the just-drinks grapevine this week is that Stolichnaya owner SPI Group is desperately seeking a US importer to take over from Pernod Ricard, which has to end its involvement with Stoli within six months to satisfy competition authorities.
Right now, however, the question is perhaps not so much whether anyone is interested, but whether anyone is willing to risk getting involved.
Over in Russia, yet more confusing reports emerged on Wednesday (30 July) in state-controlled media about the ownership of the brand.
Depending on which government department you listen to, it seems the Kremlin has not given up hope of seizing control of Stolichnaya along with various other vodka brands.
There is also talk of a joint venture between the state and SPI, with group owner Yury Shefler quoted in the Kommersant publication as saying he was "ready to seek compromise with the Russian government". Apparently the court battles with the Kremlin are draining SPI's finances.
As one analyst told just-drinks this week: "It is difficult to deal with SPI when there is a government who may just take the rights back on a whim". It is like negotiating a price, only to realise you are not talking to the true owner. Or worse, you pay a price, only to find that the true owner has turned up on your doorstep to demand back what they claim is rightfully theirs.
Added to this, no one seems sure what, if anything, is for sale or how much it is worth. Again just-drinks hears that some analysts have been unable to get accurate market information for Stolichnaya in the US because SPI has not provided the figures.
Some have suggested Beam Global, owned by Fortune Brands, would be favourites in a Stoli sale. President and CEO Tom Flocco told just-drinks recently that the group would be interested, but he added: "[Stolichnaya's] a brand that, based on what I've read over the last two or three years, some smart people worked very hard to get out of the dual-ownership structure. I don't know why they weren't able to get something done, so I can't really comment on whether it's ever going to become available."
PS readers: Next time you bump into a Pernod Ricard executive, ask them how easy it has been to negotiate with the Russians.
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