The French drinks company Belvedere is to acquire a controlling stake in the Polish vodka producer Polmos Krakow, the Polish press reported today.

Talking to the news service Interfax, a Polmos Krakow spokesman said: "The company will be bought by Belvedere. It will be done through a capital increase addressed to Belvedere."

Belvedere's Polish unit Belvedere Dystrybucja will make the purchase of 78% of the company's stock on behalf of its owner. Of the remaining 22% stake, 15% will be given to employees.

The price of the deal was not disclosed.

Polmos Krakow owns the Cracovia Vodka brand among others. The Polmos, which employs some 300, reported a PLN28.8m loss in 2001.

In related news, Belvedere yesterday reported a €2.1m (US$2.05m) net loss for the first half of 2002, compared to a €3.6m net loss for the same period of 2001.

Operating profit reached €140,000 for the period, compared to a loss of €570,000 for the same period last year.

Meanwhile the privatisation of the Polish vodka industry continues. The country's Treasury Minister Wieslaw Kaczmarek told MP's yesterday that the process was expected to be completed by the end of 2003.

The recently announced 30% cut in excise on spirits, to be introduced this year, has boosted the attractiveness of the producers to potential investors, Kaczmarek said.