Beam Global Spirits & Wine, Inc. and the Edrington Group Announce Dynamic New International Sales and Distribution Alliance

The alliance will bring both companies closer to customers and consumers through its unique mix of joint venture and wholly-owned sales and distribution companies.

04/09/08 Beam Global Spirits & Wine, Inc., (Beam Global) and The Edrington Group (Edrington) announced a new sales and distribution alliance to build their routes-to-market in 24 key international growth markets.

It is intended that the alliance between the two major premium spirits companies will launch March 31, 2009. The timing corresponds with Pernod Ricard’s withdrawal of ABSOLUT Vodka and associated brands on October 1, 2008 from the Maxxium Worldwide sales and distribution network, and Rémy-Cointreau’s planned departure on March 30, 2009.

The alliance spans 24 influential markets with combined sales of more than U.S. $1.5 billion (GB£825 million; €1 billion).

* Beam Global and Edrington will have joint ownership of sales and distribution efforts in ten markets: Spain, UK, Russia, China, Hong Kong, European travel retail, and southeast Asia (specifically Singapore, Malaysia, Indonesia and Thailand). The joint portfolio significantly expands the companies’ combined market leadership position in the UK and Spain.

* Beam Global-owned sales teams will distribute both the Beam Global and Edrington brands in eight markets: Australia (in continued affiliation with Coca-Cola Amatil), New Zealand, Canada, Philippines, Germany and Indochina (specifically Cambodia, Laos and Vietnam).

* Edrington-owned sales teams will distribute both Edrington and Beam Global brands in six markets: Norway, Sweden, Denmark, Finland, Taiwan and Korea.

The alliance will achieve market leading positions in Bourbon through Jim Beam and Maker’s Mark, Scotch Whisky via The Famous Grouse and The Macallan, Canadian Whisky via Canadian Club, Tequila via Sauza and Rum via Brugal.

The alliance will account for 90 percent of the current Beam Global/Edrington sales generated through Maxxium. Other markets are handled by a collection of third-party distribution arrangements. With its combined portfolio of premium brands, the collective strength of this new entity will drive value and growth in the selected markets, augmented by an excellent range of local and developing brands, such as Harveys, Cockburn’s, DYC and Sourz.

The alliance will bring both companies closer to customers and consumers through its unique mix of joint venture and wholly-owned sales and distribution companies, with Beam Global and Edrington remaining responsible for marketing, innovation, product development, pricing and strategy for their respective brands.

Efficient and Responsive Routes to Market

In a joint statement, Tom Flocco, president and chief executive officer, Beam Global Spirits & Wine, Inc., and Ian Curle, chief executive, The Edrington Group, said: “We are delighted to announce our new alliance. It enables the collective strength of our combined and complementary portfolios of premium brands to flourish in a more efficient and responsive distribution vehicle. It also will build on the success of Maxxium by providing improved agility at a local level, with increased access to consumers. Importantly, the alliance drives value and growth in many of our main markets.”

Donard Gaynor, senior vice president, managing director, international, Beam Global, and Bill Farrar, Edrington’s group sales and marketing director, who co-chair the Maxxium executive committee, said: “In a consolidating drinks market, it is beneficial that we find innovative, cost-efficient routes-to-market and this alliance offers significant operational and market advantages. As a powerful competitive distribution vehicle, we are better positioned to meet the opportunities that lie ahead. For growth-focused companies like ours, the goal is simple: join forces in ways to outperform the market and grow value, sales and market share in a cost-efficient way.”

It is intended that preparation for the launch of the alliance will begin with the withdrawal of V&S from Maxxium on October 1, 2008 and conclude March 30, 2009. In advance of the March 31, 2009 launch of their alliance, Beam Global and Edrington will leverage the strengths of the companies and maintain the momentum achieved in producing record results for the last four years. It will ensure minimal disruption to customers in the period up to the launch. Beam Global, Edrington and Maxxium are engaging in active information/consultation with Maxxium employees and their representatives where necessary as Pernod Ricard and Rémy-Cointreau exit from the sales and distribution joint venture.