Pernod says no to Cuervo but declares interest in craft spirits

Pernod Ricard is not about to a deal with the Beckman family and take José Cuervo, the world’s best selling Tequila, into its portfolio, but its next foray in the mergers and acquisition market could be in the craft spirits sector.

pierre-pringuet

Pierre Pringuet hinted that the dynamic craft spirits sector, especially in the US, was attractive.

Deputy chairman and chief executive Pierre Pringuet said in London yesterday that he had been surprised by reports from Paris last week that he wanted José Cuervo to fill the Tequila gap in his portfolio. “I was asked if it [Cuervo] is a desirable brand – and it is – but there are no on-going discussions about it,” he said.

Diageo, which distributes Cuervo until a distribution agreement with the Beckman’s runs out in the summer, wanted to buy the brand but walked away from it late last year when the Beckmans declined to sell. A Beckman subsidiary will take over distribution in the dominant US market.

Pringuet reaffirmed that Pernod Ricard too does not wish to enter distribution agreements for brands it does not own. “Distribution on its own is not enough,” he said. And while he confirmed that the French group would not be making a “transformational” acquisition within the next couple of years, he said that “tactical” purchases were an option.

He hinted that the dynamic craft spirits sector, especially in the US, was attractive and said: “You may see some activity in that sector quite soon.”

Craft spirits, which sell at premium and super-premium prices, have attracted much attention and growing consumer interest in the US. But finding a company or brand with the right growth potential will not be easy, although Pringuet hinted that he may soon be about to announce that he has done so.

“It’s all about size. Is there a specific recipe with distinctive packaging that makes a product stand out from major brands?” he said. The key question for Pernod Ricard was whether any craft product had the potential to be developed into a significant part of the Pernod Ricard portfolio, first in its home market and later globally. “All brands started small,” he said.

One company not in Pringuet’s sights is the troubled French group Belvedere, which has Sobieski vodka and Scotch brand William Peel in its portfolio. US film star Bruce Willis is among its shareholders with about 3% of the equity. Pringuet says Belvedere’s brands do not interest him.

One Response to “Pernod says no to Cuervo but declares interest in craft spirits”

  1. Rednail64 says:

    I’m guessing Cuervo will go independent as no one will be willing to pay their asking price, which I would peg at $4 billion U.S.

    I predict they’ll tie up in the U.S. with the new Stoli company.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

We encourage debate in the comments section and always welcome feedback, but if you spot something you don't think is right, we ask that you leave an accurate email address so we can get back to you if we need to.

Subscribe to our newsletters

Supply Chain Assistant

Speciality Drinks
London NW10 7SF, UK

On-Trade Regional Sales Manager

Anthony Byrne Fine Wines
West Midlands & Northants

Supply Chain Co-ordinator

Speciality Drinks
London NW10 7SF, UK

Logistics Team Leader

Speciality Drinks
London, UK

Assistant Operations Manager

Speciality Drinks
London, UK

Technical Manager

North South Wines
West Drayton, UK

Key Account Manager

MMI Maldives
Maldives

Business Manager - Impulse

Australian Vintage
Croydon, UK

Decanter Awards Marketing Manager

Decanter
London, UK

Customer Development Manager - South London

Love Drinks Ltd
London, UK

Exclusive Masterclass: Chablis on Tour

London,United Kingdom
29th Apr 2019

Vinexpo Bordeaux

Bordeaux,France
13th May 2019

London Wine Fair 2019

London,United Kingdom
20th May 2019
Click to view more

The Global Grenache Masters 2019

Deadline : 26th April 2019

The Tuscan Masters 2019

Deadline : 26th April 2019

Click to view more

The Global Riesling Masters 2018

View Results

Rioja Masters 2018

View Results

Click to view more