Absolut to be sold off

Joe Bates

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The Swedish government has confirmed it plans to sell off V&S Group, the manufacturer of the second best-selling spirit in duty-free, Absolut vodka. V&S Group is one of six state-owned assets the country's new right-of-centre government plans to privatise in an eagerly anticipated move, which financial analysts value at about SEK220bn ($32bn). No details have been released yet on the timing of any sale, but likely candidates for Absolut when it is put on the shelf include Pernod Ricard, which currently lacks a global vodka brand, Brown-Forman and Constellation Brands.

The announcement is another potential blow for distribution alliance Maxxium, which has V&S Group as one of its four shareholders. Last month it was announced that Rémy Cointreau was to withdraw from the joint venture by 2009. According to the International Wine & Spirit Record (IWSR), V&S Group has a 7.8% share of total duty-free spirit sales, its total case sales increasing by over 190% in 2005 due to the exceptional performance of Absolut.