Another Buyout Rumor

For the last week, the wine press has been reporting that Allied-Domecq may be a takeover target by Pernod Ricard. A-D owns brands like Clos du Bois, Callaway, Gary Farrell (which they just bought last year), Mumm, Buena Vista, Jerry Garcia, Etc. Pernod Ricard is a French company that bought the spirits brands of Seagram's when that split up a few years ago (Diageo got the wine brands). Pernod does own a few wine brands (Orlando-Wyndham and Jacob's Creek of Australia primarily) but they make the vast majority of their profits from spirits (Wild Turkey, Jameson's, Chivas Regal, Seagram's Gin/Vodka and their eponymous anise spirits, Pernod and Ricard). What is interesting to note about this potential acquisition is that the expected price for Allied-Domecq is US$17 billion. Compare that to Robert Mondavi, one of the largest, best known wine companies in the world, which sold for US$1.3 billion and you have a sense of the true scale of spirits in the world compared to wine.

Although some have criticized me for lamenting wine's lagging consumption rates, "its not a race" they say, I have to continue to lament the sheer size of the spirits industry compared to wine. For health reasons alone I would rather see people drinking more wine........