EARLY TERMINATION of the DISTRIBUTION AGREEMENT for V&S by FUTURE BRANDS
PERNOD RICARD ANNOUNCED the signing of an agreement with Fortune Brands for an early termination of the distribution by Future Brands of Vin & Sprit brands in the US, and in particular Absolut, effective October 1. The initial contractual term of the distribution agreement for V&S brands by Future Brands, a joint venture company between V&S and Fortune Brands, was scheduled to end on February 2O12. The joint venture partners have agreed to an early termination of this agreement on October 1, 2OO8 with Pernod Ricard paying to Fortune Brands a compensation of $23O million. Together with the termination of the distribution, V&S will also stop being a shareholder in Future Brands.
Absolut and the rest of the V&S portfolio will join Pernod Ricard USA portfolio of leading spirits and wines brands on October 1. The savings generated by stopping the payments of commissions to Future Brands, the quicker than anticipated implementation of cost synergies on North American structures and the very positive impact of an immediate combination of brand portfolios in the US will more than offset the costs of exiting this distribution agreement.
Separately, and as part of the announced disposal plan, Pernod Ricard will sell the Cruzan rum brand and related assets to Fortune Brands for an amount of $1OO million. Cruzan had been acquired in 2OO5 by V&S.