Richard Burrows: Make mine a double - mixing two drinks giants into one takes years of experience

As he tidies up after the £7.6bn takeover of Allied Domecq, Pernod Ricard's director-general talks spiritedly with Abigail Townsend
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Pernod Ricard's acquisition of Allied Domecq - owner of Beefeater, Mumm and Malibu, among many other brands - completed at the end of July, and Burrows is immersed in pulling the two groups together. "The integration is under way, and has been since the completion of the acquisition. The good news is that [it's] moving a lot faster [than expected]." Burrows believes it will be completed within two years, a year less than originally estimated.

Burrows puts the success so far down to a £4.3bn deal back in 2001, in which Pernod Ricard and its competitor Diageo together broke up the Canadian drinks company Seagram, giving management recent experience of significant integration. This latest deal, though, has taken Pernod Ricard to a new level. Along with his fellow director-general, Pierre Pringuet, Burrows is working to ensure the momentum continues.

One of the first issues addressed has been Stolichnaya. Spirits International (SPI) owns the vodka brand, and Allied Domecq was the US distributor, selling around 1.9 million cases a year. The €100m (£68m) deal, announced last week alongside interim numbers, saw Pernod Ricard take over as global distributor.

However, it is clear that the group would like to buy the brand outright. "We have first refusal," confirms Burrows. Should a deal go through, the group would get a hefty refund on the €100m.

Yet Stoli is not that simple. A bitter row is going on between SPI and the Russian authorities about ownership of the brand, and last year the Federal Treasury Enterprise, an arm of the Russian government, filed a lawsuit in New York against SPI. Allied Domecq was named as the distributor and Pernod Ricard has inherited the case.

"Nothing changes," says Burrows. "We have to stand in Allied Domecq's place with respect to any legal action against us."

Pernod Ricard has been in talks with the Russians directly. "We have had contact with the Russian authorities," Burrows says. "Russia is going to be a very important market for us in the future."

The group has big plans for Stoli and already intends to launch in China: "The market for premium, Western spirits is growing pretty fast, and one of the sectors we believe will develop is premium vodka. That's something we would get going on straight away."

Stoli is not the only brand Pernod Ricard has acquired. Its chairman, Patrick Ricard, was quoted recently as saying the acquisition of Allied Domecq would leave Pernod Ricard with "tail" brands that would be sold off. Burrows disputes this, arguing that every purchase, no matter how small, has a "role": "A brand could be found in one market only, or even just one city, but provided it's successful, it fits well into our portfolio. Size is not an issue." He does concede, however, that not being profitable is a different story.

At the moment, however, the company is focused on selling three brands: the whiskies Glen Grant, Braemar and Old Smuggler, a move decreed by the European Competition authorities. BNP Paribas is drawing up information memoranda, and Burrows says that around 10 potential buyers are "champing at the bit".

The deal is likely to raise upwards of €50m. This, coupled with the cash from the sale of the newly acquired Quick Service - home to Dunkin' Donuts and Baskin-Robbins ice cream - will pay down net debt. It currently stands at €8.6bn, and Burrows admits the strengthening dollar will have a negative impact.

Yet while organic growth has its place, and marketing costs will rise, Pernod Ricard remains open to more deals - although, says Burrows, for the moment they would have to be "once in a lifetime" opportunities.

The champagne brands Lanson and Taittinger have been put up for sale and would fit with Pernod Ricard's newly acquired Mumm and Perrier Jouet. Burrows won't say whether these are "once in a lifetime" chances but does insist wine is important. Currently, over at Diageo, they're mulling whether to buy New Zealand's Montana, a former Allied Domecq wine brand. The Montana option was agreed as part of negotiations when Pernod Ricard bought Allied Domecq, and ensured that Diageo did not go for the entire group.

But as Burrows puts it: "I have to say, if they decide not to buy Montana, there will be a big cheer going up around Pernod Ricard." Wine sales count for around a fifth of volume and Burrows says he would "dearly love to see that increase". The focus is on mass-market, premium-branded wines, such as Jacob's Creek. Champagne remains integral, says Burrows, as it complements a newly enriched luxury segment (Pernod Ricard now owns Courvoisier cognac).

Booze is, if he'll pardon the expression, in Burrows' blood. Born in Ireland, he started his career as a chartered accountant but joined the spirits industry at the age of 25, when he got a job at Irish Distillers. Pernod Ricard bought the company in 1988 and, when the former director-general retired in 2000, the board invited Burrows and Pringuet to take on the role jointly. Married with four children, Burrows now lives in Paris but still has a home in Dublin.

An Irishman he may be, but he is a true Pernod Ricard man, too. "My colleagues are European," he says with a laugh, before adding: "The fact is that we are a French company. The majority of people who work in Pernod Ricard are French. It's our philosophy to promote from within."

Speaking at a press conference before this interview, he is flanked by senior colleagues and, for all the bonhomie and ample wine and food laid on, there is a whiff of "them and us" about the affair. The atmosphere is hardly helped by Burrows' somewhat uncanny resemblance to a character from the gangster film Goodfellas.

Burrows evidently feels at home within this drinks family. His four-year contract was renewed in 2004 but he refuses to discuss what happens when that runs out. He has no interest, either, in talking about his life outside: he's a keen sailor and hiker, as well as a rugby fan, and is Governor of the Bank of Ireland. But his conversation is all Pernod Ricard. Perhaps, then, it is singularly fitting that whenever he does step down, it will be the transformation of the drinks giant that he'll look to with pride, and not that golden clock.


Born: 16 January 1946.

Education: trained as a chartered accountant.

Career (1971): joins Irish Distillers.

1972: managing director of Irish Distillers' Old Bushmills Distillery.

1976: general manager, Irish Distillers.

1978: chief executive.

1991: chairman and chief executive of Irish Distillers (acquired by Pernod Ricard 1988).

2000: director-general, Pernod Ricard.

2004: member of board of directors.

Other positions: Governor of the Bank of Ireland.