James Wilmore

just Five Years Ago: Bacardi takes a stake in Patron Spirits

By | 30 July 2013

Bacardi agreed a deal to take a stake in Patron five years ago this week

Bacardi agreed a deal to take a stake in Patron five years ago this week

Five years ago this week, it emerged that Bacardi had agreed to acquire a minority stake in premium Tequila producer Patron Spirits

As privately-owned groups, the Las Vegas-headquartered Patron and Bacardi did not reveal the size of the stake, merely describing it as “significant”.

The lead-up to the deal, however, was shrouded in controversy. Patron's co-founder Martin Crowley died in 2003 and, after his death, Bacardi claimed it had made an agreement with Crowley's executors to buy the unspecified stake in Patrón for US$175m. However, in 2007, the executors agreed that John Paul DeJoria, who co-founded Patron with Crowley, could acquire Crowley's 50% holding in Patrón's parent company, Caribbean Distillers Corporation, for $755m. 

This led to Bacardi launching a lawsuit to block the move, based on its prior agreement with Crowley's executors. In July 2008, Bacardi got what it wanted.

So, what has Patron been up to in the intervening years? 

Later in 2008, its then COO John McDonnell told just-drinks that the group had seen a 32.5% year-on-year sales rise in the US.

In 2009, the group revealed it had switched distributors in Mexico to its new friends, Bacardi, describing the country as one its most important markets. The following year, it emerged that Patron had secured a listing for its Tequila with British Airways.  

In 2011, the company branched out to India through a new partnership with Mumbai-based Aspri Spirits.

Last year, Patron's McDonnell was appointed as chairman of the Distilled Spirits Council of the United States (DISCUS). In May, the company switched its distributor in Turkey.

Last October, McDonnell told just-drinks that Tequila was taking share from vodka in the travel retail sector, while in Asia, he said, wood-aged Tequila - such as Patron's Anejo and Reposado brands - was grabbing a slice of the whisk(e)y market.

McDonnell was then promoted to Patron's international president, as well as retaining the role of COO.

It was with some surprise, then, that the company announced in May this year that it had appointed a new international president, while failing to mention McDonnell. After enquries by just-drinks, it emerged that McDonnell had decided to quit the company for pastures new.

Being a private company, the group does not release sales figures, but according to its website Patrón Tequila “continues to set new sales records every year” and was “the first spirit brand in its price point category to sell 1m cases”. Patron's portfolio now consists of 12 premium Tequilas. 

Bacardi notes on its website merely that it has a "stake" in Patron's parent company

Expert analysis

Tequila & Mezcal in BRIC to 2016: Market Guide

"Tequila & Mezcal in BRIC to 2016: Market Guide" provides in-depth detail on the trends and drivers of the Tequila & Mezcal market in BRIC. The report includes quantitative information (historic and forecast market values), as well as data, to help companies in the Alcoholic Drinks industry better understand the changes in their environment, seize opportunities and formulate crucial business strategies.

Sectors: Emerging markets – BRIC, Spirits

Companies: Bacardi

There are currently no comments on this article

Be the first to comment on this article

Related research

Bacardi Limited - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report

MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organization to sustain its competitive advantage....

Bacardi & Co Ltd in Wine (World)

Bacardi’s position as the world’s 12th biggest wine company by volume is based almost entirely on its Martini vermouth and other sparkling wine brand variants. With these products focused in the mature markets of Western Europe and North America, thi...

Global market review of rum – forecasts to 2017

For a category that sells around 146.4m cases annually, it may seem unusual to characterise Rum as a relatively unexploited opportunity. Indeed it is already a diverse and eclectic category with a wide geographic spread but there are a number of regi...

Related articles

The just-drinks Interview - Edrington CEO Ian Curle - Part II

In the first part of just-drinks' interview with the CEO of Edrington, Ian Curle set out why his company was bringing its global distribution in-house and investing heavily in its The Macallan Scotch whisky. In part two, Curle talks about his company's unique ownership structure and shares his thoughts on the next possible golden era for Scotch.

just the Facts - Spirits Acquisition Multiples, 2001 to Present Day

Eyebrows rose earlier this week at the US$16bn that Suntory is set to pay for Beam Inc. At 20 times the company's EBITDA, the transaction is at the more expensive end of the scale. Here, courtesy of analysts at Nomura, we list the multiples of spirits purchases this Century.

Analysis - Little likelihood of spirits consolidation any time soon

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.

Read further items in this columns

just Five Years Ago

Every month we look back at what was making the headlines five years ago. What happened? Why? And, where are they now?

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page