LONDON (Brand Republic) 鈥 UK drinks conglomerate Allied Domecq has won the exclusive US distribution rights to the premium Russian-made vodka brand Stolichnaya.
The 10-year deal fills a hole in Allied鈥檚 portfolio of spirits, which up until now has not contained a vodka brand.
The deal will also cushion the company if it misses out on a similar deal to distribute Absolut vodka in the UK and steals a march on rival Diageo, which previously held the rights to the Stolichnaya brand.
Absolut is owned by Vin & Sprit, a small state-owned Swedish manufacturer, but its marketing and distribution is handled by Canadian group Seagram.
Seagram is currently auctioning off its spirits portfolio, pending a merger with French entertainment group Vivendi, in order to concentrate on its media interests.
Allied Domecq chief executive Philip Bowman refused to say whether the Stolichnaya deal effectively ruled out the company from clinching the a deal to manage Absolut, seen as the jewel in the Seagram portfolio.
Absolut鈥檚 owner Vin & Sprit made it clear from the start of the £4.8bn Seagram sell-off that any buyer would not automatically get the rights to market and distribute the iconic vodka brand.
Bowman refused to say how much the company had paid for the Stolichnaya rights, but analysts said it could be as much as £50m. The brand is the biggest premium vodka brand in the world, selling 55m cases annually.
Diageo did not bid for the rights, despite being given first refusal, and shrugged off the loss. It said it wants to concentrate on its remaining vodka brand, Smirnoff.
Allied鈥檚 Bowman said, 鈥淎dding vodka was one of our key strategic priorities and this is one of the two premium exported vodkas in the US.鈥
Todd Martin, president of Allied鈥檚 US spirits business, said the company remained 鈥渧ery much鈥 in the Seagram auction. 鈥淲e have made a conscious decision this was very attractive financially and strategically,鈥 he said.