STOLICHNAYA, the Russian vodka brand, looks set to become the centre of a multi-million-pound bidding war following Pernod Ricard's takeover of Swedish maker Absolut.
In the last few days the French spirits giant, which owns Chivas Brothers, has agreed to stop distributing Stolichnaya vodka as it beds in its latest £3.5bn acquisition.
Analysts now say focus will turn to Stolichnaya. SPI, the brand's Russian own
er, is understood to have hired investment bank Lehman Brothers to explore options that could lead to the sale of the brand and distribution rights. Analysts believe that SPI could raise as much as £1.5bn if Stolichnaya went up for auction.
Bacardi-Martin, Campari and Brown-Forman are being tipped as possible suitors, as Diageo has effectively ruled itself out after buying Ketel One.
Analysts say that vodka is the most dynamic global spirits category. Stolichnaya currently controls around 5% of the vodka sector in the United States, the world's most important spirits market, where vodka consumption is growing by over 6% a year.
Despite Stolichnaya's relatively modest market share it is growing at a faster rate thanks to its strong Russian heritage and premium positioning. The UK is Stolichnaya's third biggest export market behind the US and Greece.
Meanwhile, Pierre Pringuet, chief executive of Pernod Ricard, has said he plans to sell £780m of local brands to reduce debt following its completion of the Absolut acquisition.
He declined to comment on which names would be sold but analysts have speculated that they will probably include the Scotch whisky brands Prince Charlie, Passport, Royal Salut and White Heather.
One drinks analyst said: "It has several non-core Scotch whisky brands that, given the recent high in the market, it probably feels it is opportune to sell."
The news comes amid a time of unprecedented interest in the mid-tier of the whisky industry, with speculation surrounding a series of deals for similar-sized distilleries.
Earlier this month Scotland on Sunday revealed that Pernod is understood to be in final negotiations to sell its Glendronach malt whisky distillery.
It is understood Chivas Brothers has received a first round of bids for the malt and is close to sealing a £30m deal for the Huntly distillery.
Whyte & Mackay is understood to be eyeing a possible takeover of Glen Moray, the Elgin single malt brand put on the market by Glenmorangie. And Tullibardine whisky distillery is in discussions with Swiss bankers in a move that could lead to a sale.
The full article contains 421 words and appears in Scotland On Sunday newspaper.
