Blog: Olly WehringFor sale: One historic vodka brand, ownership disputed

Olly Wehring | 16 June 2008

The production line of M&A deals being churned out by the drinks world looks set to continue with the news today that SPI may be about to hang a for sale sign around the neck of its Stolichnaya vodka brand.

It is the logical step for the long-term health of the brand. SPI currently owns the brand outside of Russia with the Russian government the owner at home. Pernod Ricard has a deal with SPI for the distribution rights on the global market, but, following its successful bid for Absolut, that contract is set to end.

Before Pernod, SPI had a similar deal with Allied Domecq and before them Diageo.

Meanwhile, the battle for the rights and heritage of the brand rages on between SPI and the Russian state.

Of course, there would be a number of other drinks groups eager to take on the distribution rights of such a brand, not least of which is Beam Global Brands, the loser in the race to secure Absolut.

However, Stoli is crying out for some stability and I can't help but feel that an outright sale would be the best option to provide this.

That said, any bidder for the brand is going to be looking for some stability too, and unlikely to want to fork out US$3 billion for the honour of going head-to-head with the might of the Russian authorities.

SPI must know this though, so I can't help but wonder if they think a settlement with the Russian state is close.

As a bit of background on all this it's worth checking out the piece our spirits columnist Patience Gould wrote last month on Stoli and the effects of the V&S deal on the brand

As she argues, the surprising thing isn't the chequered history of the brand but the fact that the brand's equity has withstood such a track record, which should give you some idea of why someone will want to pay US$3bn for it.


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