STOCKHOLM: After 90 years in state hands, Sweden plans to sell off one of its crown jewels, the Absolut Vodka brand, sparking interest from suitors in the drinks industry vying for a share of the expanding global vodka market.
No sooner had Sweden’s centre-right government presented a bill to parliament on Friday to privatise Vin and Sprit, owner of the Absolut brand, than Bacardi, maker of the world’s leading rum brand, expressed interest in the sale.
Bacardi chief executive Andreas Gembler on Monday said the Bermuda-based drinks group had written to the Swedish government to express its interest in buying V and S.
Vin and Sprit owns a number of wine and spirit brands, including Plymouth Gin and OP Andersson aquavit, and has owned Absolut since its inception in 1917.
The company -- 100 percent owned by the Swedish state -- is valued by analysts at some 5.6 billion dollars (4.3 billion euros), a figure described as “conservative” by V&S spokesman Jacob Broberg.
“V and S and Absolut especially would be a terrific fit for Bacardi,” Gembler told the Financial Times.
“Of the few global brands that are really left to acquire, V and S -- and in particular Absolut -- obviously represents a jewel for a company like ours,” Gembler said.
“We have received such a letter. It’s registered,” a spokeswoman for Swedish Financial Markets Minister Mats Odell, Mia Widell, told AFP.
With the drink increasingly fashionable, global vodka consumption is forecast to increase by 11.4 percent between 2003 and 2008, according to industry analysts Vinexpo.
Vodka currently accounts for some 23 percent of global spirits consumption or around 500 million 9-litre cases. Most vodka is sold in Russia and Eastern Europe, according to V&S.
In 2005 the US market accounted for sales of 46 million 9-litre cases, an increase of four percent on the year.
“Last year vodka probably surpassed whisky (on the US market) and is now the second largest category besides rum,” Broberg told AFP.
With 2006 sales up seven percent on the year and a growing presence on the US market, the Absolut Vodka brand could also be a target for the world’s number two spirit producer, France’s Pernod-Ricard.
The group made no comment on the issue but according to analysts the group “only has world distribution rights for Stolichnaya (outside Russia)” and thus lacks a major vodka brand in its portfolio.
“Acquiring Absolut would enable the group to triple its volume sales of vodka ... and strengthen its presence in the US, the biggest spirits market,” an analyst at France’s CIC Securities bank said.
The Swedish government has not said when or how it plans sell V&S but has previously said the group would go to the highest bidder.
“We have no timetable. The government will sell when it feels there’s a good opportunity,” Broberg said.
The parliamentary vote will take place in May or June, with a sale unlikely before the autumn, Widell said.
“The government has not yet decided in what way or to whom they will sell this company but we have noticed the interest,” Widell added.
“It’s not certain the government will start with V and S because they are seeking to sell six companies. They could start with some of the other companies,” Broberg said.
In the bill presented to parliament on Friday, Sweden’s centre-right government sought approval to sell state holdings in five companies in addition to V and S, including telecommunications operator TeliaSonera, banking group Nordea and the OMX stock exchange.
The Swedish state currently owns 45.3 percent of TeliaSonera, 19.9 percent of Nordea and 6.8 percent of OMX.
The two other companies set for sale are real estate company Vasakronan and mortgage lender SBAB, which are both 100 percent owned by the state.
The sales would generate 150 billion kronor (16.14 billion euros, 21.24 billion dollars) for the Swedish state over three years from 2007 to 2009, the government said in December.