Thanks in part to its renowned advertising campaigns, a vodka distilled in the southern Swedish town of Ahus has become the world's No. 3 premium spirit and one of the country's most recognizable brands.
So would the owner -- the Swedish government -- consider selling the crown jewel of Scandinavian liquor to a foreign buyer?
Absolutely.
PHOTO: AFPNWARNING: EXCESSIVE CONSUMPTION OF ALCOHOL CAN DAMAGE
After 90 years in state hands, Absolut vodka is about to be offered up for sale with its parent company V&S Vin & Sprit AB, along with five other companies in which the state holds significant stakes. The government is to seek parliamentary approval for the V&S sale on Friday.
With an estimated price tag of 40 billion kronor (US$5.7 billion), potential buyers include market leader Diageo PLC, Pernod Ricard SA and Fortune Brands, which already has a distribution deal with V&S.
"It's the best price that counts," said Swedish Financial Markets Minister Mats Odell.
The state sellout of banking group Nordea AB, telecom TeliaSonera AB, Nordic bourse operator OMX AB, real estate company Vasakronan AB and mortgage lender SBAB to help pay off the country's debt represents the biggest ideological shift since the center-right coalition government ousted the long-ruling Social Democrats in October.
Sensitive
The sale of V&S is especially sensitive, since the company founded in 1917 has been closely linked with the state's efforts to control alcohol consumption in Sweden. The government has held a monopoly on retail sales of alcohol since the 1850s and Sweden was able to preserve that even after joining the EU, citing reasons of public health.
"We don't think that the state should run businesses on a competitive market," Odell said. "The state shouldn't make, sell or distribute vodka."
Critics say rushing to find buyers for V&S could leave the liquor maker in the hands of a profit-hungry company with no sense of social responsibility.
"Odell must show that another owner would be more restrictive, but I think it will be the opposite, where a new owner will be more aggressive," said Thomas Ostros, industry minister in the previous Social Democratic government.
"The state, as an owner, has developed one of the most successful brands that Sweden has. That's nothing to be ashamed about," he said.
Selling V&S, however, might help dilute allegations about double standards in Sweden's nanny-state attitude on drinking. The Social Democrats were often criticized for promoting a restrictive alcohol policy at home, including bans on alcohol advertising in domestic media, while supporting multimillion dollar campaigns to market Absolut internationally since 1979.
Artists and designers such as Andy Warhol, Jean-Paul Gaultier and Gianni Versace have lent their talent to the bottle-focused ads that have appeared on billboards and magazines worldwide. Rock star Lenny Kravitz wrote a song specifically for an Absolut campaign.
With its range of flavors from peach to blackcurrant, Absolut is established as a luxury vodka -- a long journey from the first drops distilled from water and winter-wheat by Swedish entrepreneur Lars Olsson Smith in 1879.
V&S' product range includes other brands, such as Cruzan rum, Plymouth gin, a handful of Scandinavian aquavits and bitters and hundreds of wines. Absolut is believed to represent roughly half of the company's sales -- 10.35 billion kronor last year.
The biggest single market is the US, where Absolut is the top imported vodka. It's also growing quickly Brazil, Canada, Britain and Germany.
Fair price
V&S chief executive Bengt Baron said a fair price for the company would be 35 billion to 45 billion kronor. He declined to speculate on potential buyers.
"We want a long-term owner that shares our view of the future, which we are very optimistic about," Baron said.
Pierre Pringuet, chief executive of Pernod Ricard, has made no secret of his interest in V&S. But analysts say Fortune Brands is the prime candidate because of its distribution deal. V&S also holds a 10 percent stake in Jim Beam, the bourbon brand owned by Fortune Brands.
Absolut would also be an attractive addition to the company because "vodka, rum and gin categories are relatively weak for Fortune Brands," JP Morgan said in a research note.
Fortune Brands spokesman Clarkson Hine declined to comment on the V&S sale, but said the company was "extremely proud" of its partnership with V&S.
"We work very well together, our distribution joint ventures benefit both partners, and our close relationship has helped further build our respective brands," he wrote in an e-mail.
In any case, the new owner of V&S is likely to be an international liquor giant.
That did not concern bartender Daniel Lundberg, who predicted a new owner would safeguard Absolut's Swedish identity.
"I don't think the brand will change just because it changes hands," said Lundberg, 22, as he mixed a drink with Absolut's new pear flavor in a Stockholm hotel. "It will still say `Country of Sweden' on the bottle."
CLASH OF WORDS: While China’s foreign minister insisted the US play a constructive role with China, Rubio stressed Washington’s commitment to its allies in the region The Ministry of Foreign Affairs (MOFA) yesterday affirmed and welcomed US Secretary of State Marco Rubio statements expressing the US’ “serious concern over China’s coercive actions against Taiwan” and aggressive behavior in the South China Sea, in a telephone call with his Chinese counterpart. The ministry in a news release yesterday also said that the Chinese Ministry of Foreign Affairs had stated many fallacies about Taiwan in the call. “We solemnly emphasize again that our country and the People’s Republic of China are not subordinate to each other, and it has been an objective fact for a long time, as well as
‘CHARM OFFENSIVE’: Beijing has been sending senior Chinese officials to Okinawa as part of efforts to influence public opinion against the US, the ‘Telegraph’ reported Beijing is believed to be sowing divisions in Japan’s Okinawa Prefecture to better facilitate an invasion of Taiwan, British newspaper the Telegraph reported on Saturday. Less than 750km from Taiwan, Okinawa hosts nearly 30,000 US troops who would likely “play a pivotal role should Beijing order the invasion of Taiwan,” it wrote. To prevent US intervention in an invasion, China is carrying out a “silent invasion” of Okinawa by stoking the flames of discontent among locals toward the US presence in the prefecture, it said. Beijing is also allegedly funding separatists in the region, including Chosuke Yara, the head of the Ryukyu Independence
‘VERY SHALLOW’: The center of Saturday’s quake in Tainan’s Dongshan District hit at a depth of 7.7km, while yesterday’s in Nansai was at a depth of 8.1km, the CWA said Two magnitude 5.7 earthquakes that struck on Saturday night and yesterday morning were aftershocks triggered by a magnitude 6.4 quake on Tuesday last week, a seismologist said, adding that the epicenters of the aftershocks are moving westward. Saturday and yesterday’s earthquakes occurred as people were preparing for the Lunar New Year holiday this week. As of 10am yesterday, the Central Weather Administration (CWA) recorded 110 aftershocks from last week’s main earthquake, including six magnitude 5 to 6 quakes and 32 magnitude 4 to 5 tremors. Seventy-one of the earthquakes were smaller than magnitude 4. Thirty-one of the aftershocks were felt nationwide, while 79
GOLDEN OPPORTUNITY: Taiwan must capitalize on the shock waves DeepSeek has sent through US markets to show it is a tech partner of Washington, a researcher said China’s reported breakthrough in artificial intelligence (AI) would prompt the US to seek a stronger alliance with Taiwan and Japan to secure its technological superiority, a Taiwanese researcher said yesterday. The launch of low-cost AI model DeepSeek (深度求索) on Monday sent US tech stocks tumbling, with chipmaker Nvidia Corp losing 16 percent of its value and the NASDAQ falling 612.46 points, or 3.07 percent, to close at 19,341.84 points. On the same day, the Philadelphia Stock Exchange Semiconductor Sector index dropped 488.7 points, or 9.15 percent, to close at 4,853.24 points. The launch of the Chinese chatbot proves that a competitor can
RSS