With all the movement across the Irish Distillers stable – Powers rebrand and expansion, Crested rebrand, rumours of Jameson 12 and 18 making way for NAS releases – I had been wondering when they were going to get around to doing something with Paddy. Well;
IRISH DISTILLERS ENTERS INTO EXCLUSIVE NEGOTIATIONS WITH SAZERAC FOR THE SALE OF PADDY IRISH WHISKEY
Tuesday 3rd May 2016 – Irish Distillers, an affiliate of Pernod Ricard, has entered into exclusive negotiations with Sazerac regarding the sale of the Paddy Irish Whiskey brand, the 4th largest Irish whiskey brand in the world. The transaction, if completed, would involve Irish Distillers continuing to produce Paddy Irish Whiskey at its Midleton Distillery. There would be no impact on roles at Irish Distillers; all employees would remain in place under current terms and conditions.
Commenting on the proposed deal, Mark Brown, President and CEO of Sazerac, said: “In the global market, Irish whiskey experienced the fastest volume growth in the last five years, outpacing all other spirits categories. Consumers worldwide are seeing it as an alternative to other whiskies. If this deal goes through, we are confident that we will be able to take Paddy to the next level, building on its strong history and roots.”
Anna Malmhake, Chairman and CEO of Irish Distillers, stated: “At the heart of everything that Irish Distillers does is a desire to see Irish whiskey grow. This deal with Sazerac, if completed, would allow Irish whiskey’s reputation and footprint to grow further internationally. The proposed deal would ensure that Paddy would continue to be produced with the same love and care by our team in Midleton, Cork.”
The proposed divestment of Paddy Irish Whiskey is in line with the Pernod Ricard strategy to simplify its portfolio for growth and could facilitate, among other things, targeted investment in other key Irish Distillers’ whiskey brands including Jameson and Powers to support continued growth.
Paddy Irish Whiskey is the 4th largest Irish whiskey brand in the world, selling 200,000 9-litre cases in 28 countries worldwide annually. As the Irish whiskey industry is projecting 100% growth by 2020, an acquisition of the Paddy brand by Sazerac would ensure that the brand is positioned for sizeable investment to support its future growth.
Subject to pending negotiations, Irish Distillers and Sazerac expect to sign and complete the transaction simultaneously in the following weeks. An announcement will be made if and when the transaction is complete.
About Pernod Ricard
Pernod Ricard is the world’s n°2 in wines and spirits with consolidated Sales of € 8,558 million in 2014/15. Created in 1975 by the merger of Ricard and Pernod, the Group has undergone sustained development, based on both organic growth and acquisitions: Seagram (2001), Allied Domecq (2005) and Vin&Sprit (2008). Pernod Ricard holds one of the most prestigious brand portfolios in the sector: Absolut Vodka, Ricard pastis, Ballantine’s, Chivas Regal, Royal Salute and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Kahlúa and Malibu liqueurs, Mumm and Perrier- Jouët champagnes, as well Jacob’s Creek, Brancott Estate, Campo Viejo, Graffigna and Kenwood wines. Pernod Ricard employs a workforce of approximately 18,000 people and operates through a decentralised organisation, with 6 “Brand Companies” and 85 “Market Companies” established in each key market. Pernod Ricard is strongly committed to a sustainable development policy and encourages responsible consumption. Pernod Ricard’s strategy and ambition are based on 3 key values that guide its expansion: entrepreneurial spirit, mutual trust and a strong sense of ethics. Pernod Ricard is listed on Euronext (Ticker: RI; ISIN code: FR0000120693) and is part of the CAC 40 index.
About Irish Distillers
Irish Distillers Pernod Ricard is Ireland’s leading supplier of spirits and wines and producer of the world’s most well-known and successful Irish whiskeys. Led by Jameson, our brands are driving the global renaissance of Irish whiskey. Jameson is the world’s fastest-growing Irish whiskey, experiencing 26 years of consecutive growth and hitting sales of 5m cases in 2015. Our brands are exported to 130+ markets, with over 50 of those experiencing double- or triple-digit growth.
Irish Distillers was formed in 1966, when a merger took place between John Powers & Son, John Jameson & Son and Cork Distilleries Company. In 1988 Irish Distillers joined Pernod Ricard, gaining access to unprecedented levels of investment and an extensive global distribution network. In 2015, we completed a €220m investment which doubled our production and bottling capacity to meet global demand for our products.
We employ over 600 people across our operations in Cork and Dublin.
Sazerac is one of New Orleans’ oldest family owned, privately held companies and has operations in New Orleans, Louisiana; Frankfort, Bardstown, Louisville and Owensboro, Kentucky; Fredericksburg, Virginia; Carson, California; Baltimore, Maryland; Lewiston, Maine; Manchester, New Hampshire; and Montreal Canada. For more information on Sazerac, please visit http://www.sazerac.com
So there is an Irish whiskey boom- it is the fastest growing spirit in the world right now, so surely you would want to hold on to all your stock and/or brands? Well, perhaps if you were an independent company – but less so if you are part of a global drinks giant that desperately needs to free up some revenue to pump into a brand that went from the toast of Wall Street in the 1980s and ’90s to being a ubiquitous non-event. Absolut’s misfortunes have been well documented, but with current Irish Distillers CEO Anna Malmhake being sent back to the brand she came from to work some of her magic there, Pernod will be looking to make as much money from their Irish operations as possible in order to turn Absolut around, in the hopes it becomes the magic brand it was in Brett Easton Ellis’s American Psycho.
So what are Sazerac getting? Well, this:
Two flavoured whiskeys, a standard release, and the pot still centenary edition, which is the best by a mile. Paddy is what one might call the more ‘robust’ dram in the IDL cabinet, which is a nice way of saying ‘smooth as sandpaper’. It’s a nice drink, with a big personality, and I would take it over standard Jameson on a night out – but then, I like grindcore and chili, so obviously I like my senses cranked up to 11. So what exactly Sazerac plan to do with it is going to be interesting – simply flog it hard to the American market, or expand and experiment (and then flog it hard)? Given that they own the elusive Pappy Van Winkle brand as well as the (anti-freeze spiked) Fireball, it could go either way. But as this is one of the true Cork whiskey brands, it’d be nice to see it thrive. Corcaigh abú.
You can read Mark Gillespie’s coverage of the news here.