Grand Met takes on vodka brand

BY NIGEL COPE

Grand Metropolitan topped up its vodka portfolio yesterday when the food and drinks group reached an agreement to distribute the Russian vodka brand Stolichnaya in the UK.

The agreement will help ease Grand Met's headache caused by the loss of the lucrative Absolut vodka franchise in the United States last year. Loss of the contract knocked pounds 37m off Grand Met's profits in the six months to March.

Through its IDV drinks division, Grand Met already holds the Stolichnaya franchise in the United States, Mexico and Canada. The brand currently sells around 20,000 cases worldwide, compared with the 3 million shifted by Absolut.

Stolichnaya is the seventh most popular brand of Vodka in the UK, ranking behind Smirnoff (Red Label), Vladivar and just behind Absolut, which is sixth.

Grand Met said yesterday that it was too early to say how the brand would be developed but it is clear that more marketing muscle will be put behind it.

Last month Grand Met announced plans to spend around pounds 1bn on marketing its key brands such as Smirnoff, Baileys and Malibu this year. Smirnoff is already being advertised heavily.

Last month Grand Met reported pre-tax profits of pounds 441m for the half year, though earnings in the drinks division slumped by 15 per cent.