Travel Retail and Duty Free Business Intelligence    Saturday 20 December 2014

SPIRITS AND WINES

Beam Global Spirits & Wine and The Edrington Group strike key sales and distribution deal – 03/09/08

Published: 03/09/08

Source: ©The Moodie Report

By Mary Jane Pittilla

INTERNATIONAL. US-based Beam Global Spirits & Wine and The Edrington Group of the UK have announced a new international sales and distribution alliance to build their routes-to-market in 24 key international growth markets.

In a joint press release the companies said the new tie-up aims to:

– Simplify international routes-to-market;
– Enhance combined leadership position in key markets;
– Bring both companies closer to customers and consumers;
– Give Beam Global and Edrington category leadership in key spirits categories.

It is intended that the alliance between the two major premium spirits companies will be launched on 31 March 2009.
The timing corresponds with Pernod Ricard’s withdrawal of Absolut Vodka and associated brands on 1 October this year from the Maxxium Worldwide sales and distribution network, details of which were revealed today. It also coincides with Rémy-Cointreau’s planned departure from Maxxium on 30 March, 2009.

The alliance spans 24 influential markets with combined sales of more than US$1.5 billion.

Beam Global and Edrington will have joint ownership of sales and distribution efforts in ten markets: Spain, UK, Russia, China, Hong Kong, European travel retail and Southeast Asia (specifically Singapore, Malaysia, Indonesia and Thailand). The joint portfolio is expected to significantly expand the companies’ combined market leadership position in the UK and Spain.

Beam Global-owned sales teams will distribute both the Beam Global and Edrington brands in eight markets: Australia (in continued affiliation with Coca-Cola Amatil), New Zealand, Canada, Philippines, Germany and Indochina (specifically Cambodia, Laos and Vietnam).

Edrington-owned sales teams will distribute both Edrington and Beam Global brands in six markets: Norway, Sweden, Denmark, Finland, Taiwan and Korea.

The companies' statement said: "The alliance will achieve market-leading positions in bourbon through Jim Beam and Maker’s Mark, Scotch whisky via The Famous Grouse and The Macallan, Canadian whisky via Canadian Club, tequila via Sauza and rum via Brugal."

The alliance will account for 90% of the current Beam Global–Edrington sales generated through Maxxium. Other markets are handled by a collection of third-party distribution arrangements. They added: "With its combined portfolio of premium brands, the collective strength of this new entity will drive value and growth in the selected markets, augmented by an excellent range of local and developing brands, such as Harveys, Cockburn’s, DYC and Sourz."

The alliance aims to bring both companies closer to customers and consumers through its unique mix of joint venture and wholly owned sales and distribution companies, with Beam Global and Edrington remaining responsible for marketing, innovation, product development, pricing and strategy for their respective brands, they continued.

In a joint statement Beam Global Spirits & Wine President and CEO Tom Flocco and The Edrington Group CEO Ian Curle said: “We are delighted to announce our new alliance. It enables the collective strength of our combined and complementary portfolios of premium brands to flourish in a more efficient and responsive distribution vehicle. It also will build on the success of Maxxium by providing improved agility at a local level, with increased access to consumers. Importantly, the alliance drives value and growth in many of our main markets.”

Donard Gaynor, Beam Global's Senior Vice President, Managing Director, International and Bill Farrar, Edrington’s Group Sales and Marketing Director – who co-chair the Maxxium executive committee – said: “In a consolidating drinks market, it is beneficial that we find innovative, cost-efficient routes-to-market and this alliance offers significant operational and market advantages. As a powerful competitive distribution vehicle, we are better positioned to meet the opportunities that lie ahead. For growth-focused companies like ours, the goal is simple: join forces in ways to outperform the market and grow value, sales and market share in a cost-efficient way.”

Preparation for the launch of the alliance is intended to begin with the withdrawal of V&S from Maxxium on 1 October 2008 and conclude 30 March 2009. In advance of the 31 March 2009 launch of their alliance, Beam Global and Edrington "will leverage the strengths of the companies and maintain the momentum achieved in producing record results for the last four years", they said.

"It will ensure minimal disruption to customers in the period up to the launch. Beam Global, Edrington and Maxxium are engaging in active information/consultation with Maxxium employees and their representatives where necessary as Pernod Ricard and Rémy-Cointreau exit from the sales and distribution joint venture."

About Beam Global Spirits & Wine

Beam Global Spirits & Wine's brand portfolio included Jim Beam Bourbon, Sauza Tequila, Canadian Club Whisky, Courvoisier Cognac, Maker's Mark Bourbon, Laphroaig Scotch Whisky, Larios Gin, Whisky DYC, Teacher's Scotch Whisky, DeKuyper Cordials and Liqueurs, Knob Creek Bourbon and Starbucks Liqueurs. Beam Global Spirits & Wine is part of Fortune Brands Inc, a leading consumer brands company with annual sales exceeding $8 billion.

About The Edrington Group

The Edrington Group is Scotland's leading international premium spirits company, producing The Famous Grouse, the best-selling whisky in Scotland for the past 28 years. Its portfolio also includes Cutty Sark and premium single malts The Macallan and Highland Park. In February the group acquired a 60% stake in Brugal, the leading golden rum in the Caribbean. Edrington is privately owned, based in Glasgow, has ten sites around Scotland (including five distilleries), employs over 800 people and had a turnover of £291.5 million in the 12 months to March 2008 (excluding Brugal). It exports to over 100 countries and has a corporate strategy of focusing more resources on developing its premium whisky and rum brands to leading positions in international markets. Edrington is controlled by a charitable trust, The Robertson Trust, which gave a record £8.4 million to a wide variety of charitable causes last year.