Future uncertain for Allied brands

[Sally Toms]

by Dominic Roskrow

The future of Allied Domecq’s whisky distilleries including Laphroaig, Scapa and Glendronach was uncertain as Whisky Magazine went to press after confirmation that Pernod Ricard and Fortune Brands have made a joint bid for the company.

Allied has long been a potential target for takeover and several companies have been interested in it.

And as a result Pernod Ricard’s move has had two knock-on effects: it has provoked a reaction that might lead to a major bid from another source, and it has attracted suitors interested in picking some brands from the company’s portfolio should Allied be broken up or the authoriities insist on the new owners offloading some brands.

Most of the media speculation has been concerned with Allied’s biggest brands and in the area of whisky attention has been on international blends Ballantine’s and Teacher’s. Many analysts believe that the distilleries providing the bulk of such blends will be sold with them.

But Scapa and Lahroaig in particular are seen as trophy brands in their own right, and they have provoked interest. Bruichladdich’s Mark Reynier is among those reported to have enquired about their potential availability.

At the time of going to press two other bidders. Constellation and Brown Forman, had stated an interest and were said to have employed advisers to look at putting together rival bids.

And Diageo chief executive Paul Walsh announced he would provide cash to any bidder prepared to consider Diageo’s wishes in their bid. Diageo is thought to be eyeing up Maker’s Mark having failed to indent the bourbon or American whiskey sectors with either BulleitBourbon or Dickel Tennessee Whiskey.

Given that Diageo worked with Pernod Ricard on the break up of Seagram, it is possible that the two companies will work together again.

Whatever the outcome, fears are growing for scores of jobs in the whisky industry. A takeover will likely mean widespread redundancies, particularly in the area of marketing but across other areas of the Allied business too.

The mothballing of some of Allied’s distilleries is also a possibility.
With the likelihood of a bidding war for Allied, the whisky sector is going through a period of considerable uncertainty.

Since LVMH’s takeover of Glenmorangie there have been two waves of redundancies with more expected.

[Iain]

Herald reports the deal has been completed:

http://www.theherald.co.uk/business/43758.html

[BruceCrichton]

Which of the Allied brands have been sold off and which are still with Pernod/Campbell?

[Iain]

I believe Pernod currently have Ballantines, Long John and Scapa from the old Allied stable. Not sure if they have any more, and of course they could always sell on...

Teachers and Laphroaig certainly went to Fortune Brands.

[BruceCrichton]

Did Fortune have any other whisky brands before the sell-off?

[Iain]

Until the Allied deal, they haven't owned a Scotch brand since they sold what is now W&M back in 2001, afaik.

But they may have/have had agency or distribution deals for one or two in some parts of the world - the co is a partner in Maxxium.