Allied Domecq set for new alliances

Allied Domecq, the Beefeater Gin to Courvoisier drinks group, is planning to announce the results of a wide-ranging strategic review within the next few months which is likely to lead to the formation of a series of international joint ventures and alliances with spirits companies.

The review is seen by observers as a last-ditch attempt by Allied's chairman, Sir Christopher Hogg, and chief executive, Tony Hales, to reverse the group's flagging share price and counter mounting criticism from institutional shareholders. One said yesterday: "They [the directors] have got to do something quickly...they have got to produce a better performance."

Allied could tie up a deal by 11 November when it announces its annual results. But the timing of the announcement hinges on the outcome of the proposed pounds 23bn merger between GrandMet and Guinness. The European Commission is likely to demand that the combined group, to be called GMG Brands, will have to sell off some of their brands and Allied is likely to bid for one or all of them.

Allied has taken a fresh look at hiving off its pub brands like Big Steak and Firkin and food business Baskin Robbins and Dunkin Donuts. But industry sources suggest that the group has once again ruled out the idea due to the costs involved and the management time it would take up. Allied is believed to have held talks with most of the world's big drinks companies including Canadian giant Seagram, Barcadi, Brown Forman, Remy Cointreau and Pernod Ricard.

An Allied spokesman said: "We are not standing idly by and doing nothing. We are looking at a range of options."

Allied Domecq is also understood to have intensified its campaign against GMG Brands by sending a submission to the Federal Trade Commission complaining the merged group would have a dominant position in the US scotch whisky market.

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