The rate of consolidation in the spirits category is markedly slower than that of many consumer industries. So, could the news this week that Suntory is set to buy Beam Inc trigger a wave of M&A? Past transactions suggest not.

When Pernod Ricard snapped up Sweden's Vin & Sprit and its Absolut vodka brand in 2008, for example, many observers suggested that the spirits industry would see a spate of other subsequent purchases. This did not materialise and, today, the top four international spirits players account for only 11% of global volumes. (Compare that to tobacco, where the top four hold around 75% market share.)

Drinks industry analysts at Nomura considered the broader spirits category in a note yesterday (15 January), and concluded that we are unlikely to see further larger-scale transactions in the coming months and years.

“In theory,” says Ian Shackleton in the note, “slower top-line growth could be seen as an accelerator of M&A, as companies seek growth from deal synergies rather than from organic growth. However, we do not regard Suntory’s … bid for Beam … as the first of many dominoes to fall.

“In mature markets, especially for the operators with full portfolios, we expect innovation to replace acquisitions as a low-capital way to achieve additional growth. In emerging markets, we expect further bolt-on deals in premium local spirits, as they provide both a distribution platform and brand equity.”

The stronger likelihood, then, suggests Shackleton, is for more purchases along the lines of Diageo's move for Mey Icki in Turkey in 2011: Expect the international players to look locally for premiumisation opportunities in the years to come. Also, we should see innovation play a greater role, particularly in the more developed markets. “(Innovation and developing new brands) represents a low capital approach to finding new growth,” flags Shackleton.

One possible purchase that Shackleton does speculate over, however, could involve Remy Cointreau, which is not having the best of times in China right now. “If the family behind Remy Cointreau were to lose confidence in the China Cognac model,” he says, “that company could be worth more as part of a larger portfolio.

“We believe that … Bacardi, with minimal Cognac exposure and little presence in Asia, could be a good fit.”