Brussels, 17th July 2008
Competition Commissioner Neelie Kroes said "It is important to ensure that consumers do not suffer as a result of mergers in terms of reduced choice or higher prices. The remedies that have been proposed by Pernod Ricard will ensure that effective competition is maintained in spirits markets concerned after its acquisition of Vin & Sprit."
Pernod Ricard is a publicly quoted French company active in the production and distribution of alcoholic beverages on a worldwide basis. Its main brands include Chivas Regal, Ballantine’s and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Beefeater gin, Havana Club rum, Martell cognac, Jacob’s Creek and Montana wines and Mumm champagne.
Pernod Ricard currently distributes the vodka brands Stolichnaya and Moskovskaya which are owned by the SPI Group. Pernod Ricard has announced that its proposed acquisition of V&S would result in the termination of the Stolichnaya and Moskovskaya distribution agreements although Pernod Ricard would continue to distribute the brands during a short transitional period until SPI identified a new distributor.
V&S is also active in the production and distribution of alcoholic beverages. Its most famous international brand is Absolut vodka but it also distributes a range of other spirits, such as Aalborg Aquavit and Gammel Dansk bitter, as well as wines primarily in northern Europe.
The Commission's investigation identified competition concerns in a number of national markets where the merged entity would have a strong market position. These concerns relate to the market for aniseed flavoured spirits in Finland, vodka in Greece, gin in Poland and Sweden and cognac, port and Canadian whisky also in Sweden.
In order to address the competition concerns identified by the Commission, Pernod Ricard offered to divest its businesses conducted under the following brands: Dry Anis in Finland, Serkova vodka in Greece, Lubuski gin in Poland and Star Gin, Red Port and Grönstedts cognac in Sweden. In the case of Canadian whisky in Sweden, Pernod Ricard has committed to discontinue the distribution of a third party's brand, Royal Canadian. As a result of these commitments, the proposed transaction would not lead to any increment in the market share of the merged entity in any of the markets concerned.
The Commission analysed the commitments submitted by Pernod Ricard and concluded that they would remedy its serious doubts and therefore ensure that effective competition would not be impeded as a result of the proposed transaction.
The Commission also examined the potential effects on competition arising from the combination of Pernod Ricard and V&S' broad portfolios of alcoholic beverages. The Commission concluded that as there are other companies in the drinks sector, often with one or more strong brands of their own, the merged entity would not be able to restrict its competitors' access to the market or engage in other practices likely to harm consumers.
More information on the case will be available at: