Blog: Chris Brook-CarterA test of spirit

Chris Brook-Carter | 13 July 2005

In the end it has been a lesson in patience. Perhaps, though, after four year’s of deal-mongering, collapsed talks, threats of legal action and bureaucratic mismanagement, the greatest lesson to be learnt from the sale of Polmos Bialystok is, think twice before entering into talks with state-run enterprises.

We have a certain amount of affection for the Bialystok sale story here, because it is almost as old as just-drinks is. In fact, the first reference of efforts to privatise Poland’s second largest vodka producer in our archives is on 31 May 2001. And, incredibly, that was a story suggesting talks over the second effort to sell the business were close to collapse.

Since then, Allied Domecq, Vin & Sprit, Bols, Pernod Ricard, Eckes and Belvedere have all been seen at one time or another as front runners to claim victory in the number of bidding processes that have taken place.

In the end, a company that was barely around when all this began, Central European Distribution Corporation (CEDC), has today (12 July) all but sewn things up. CEDC is to acquire a 61% stake in Polmos Bialystok for PLN 1.06 billion (US$312m), according to a share purchase agreement with the Polish Treasury Ministry.

In return for its patience and money – other players are thought to have balked in the past at the high asking price - it gets what so many companies before it have failed to acquire or just given up on, a leading slice in one of the most powerful vodka markets in the world.

International interest in the Polish vodka market is fuelled by both the potential in exports and a local market of 39m traditional vodka drinkers. Bialystok not only owns two of the most important brands in all of that, Zubrowka and Absolwent, but a sizeable share of those 39m consumers.

All that said, the deal is not finalised yet, and it would take a brave man - or one who had imbibed a few too many Zubrowka – to bet against another twist in this tale. Leading CEDC rival Sobieski Dystrybucja has already charged the Treasury with handling the sale incorrectly and filed a notification with the prosecutor’s office to that effect. This story has time to run yet.


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