Bourbon maker ends Diageo distribution deal
deal with Diageo which in the UK from 1 August and link up instead
with the privately owned Bacardi group.
US spirits group Brown-Forman has decided to end its distribution deal with Diageo which in the UK from 1 August and link up instead with the privately owned Bacardi group.
The move underscores the closer links between Brown-Forman and Bacardi after they signed an alliance last month to combine some of their distribution in the United States, while Bacardi already distributes the group's brands in many European markets.
Brown-Forman made the announcement along with its fourth quarter results, saying it will sell spirits directly to retailers in Britain via a cost-sharing deal with Bacardi, although it will be separate from its US Gemini Alliance.
Britain's Diageo, the world's largest spirits group, has distributed the Brown-Forman brands, which include Jack Daniels Bourbon, Southern Comfort and Woodford Reserve Bourbon, in Britain for the past 15 years.
In the year to 30 June 2001, the British group said in a statement these brands contributed around £12 million of trading profit after marketing.
Diageo, which owns Smirnoff vodka and Johnnie Walker Scotch, pointed out that last December's Seagram acquisition brought it brands such as the world's top dark rum Captain Morgan and Bulleit Bourbon which would help fill some of the gaps left in its UK portfolio when the Brown-Forman deal ended.
Brown Forman reported a five per cent fall in its earnings in the fourth quarter to 30 April to $51.2 million, or 75 cents a share, down from $54.1 million, or 79 cents.
