Spirits ease in row over selling vodka abroad
A break in the stalemate over export rights for Polish vodka surfaced last week that could add up to $400 million in value to the sector's privatization, industry members said.
The sale of state-owned Polmos vodka distilleries has taken a roller-coaster ride as state officials and Agros Holding battle over exclusive rights to sell all Polish vodkas abroad. Agros export rights date back to the 1960s and the company has taken a hard line giving up those rights, which brought in $11 million in sales in 1998 and accounted for 37.5% of the publicly traded company's turnover that year.
But the state, interested in selling off the ailing spirits sector, has been lobbying politicians and pressuring Agros to return those rights to individual breweries.
"No one's considering transferring the brands to the Polmoses unless anyone starts commercial negotiations," said Jaroslaw Mazur, director of alcoholic beverages at Agros Trading, last week. But, "we can make a deal," he added.
Most of Agros' alcohol export revenue comes from the sale of three brands, Wyborowa, Zubrowka and Luksusowa. These domestic trademarks will be owned exclusively by the Poznan, Bialystok and Zielona Gora distilleries respectively, beginning in July. As a consequence, these will be the most hotly contested of the 25 Polmos distilleries, when it comes time for privatization.
The booty would be heavier if these trademarks owned rights for exports. Last week financial daily Prawo i Gospodarka reported the state could gain up to $400 million more from the sector sale if Agros released its stronghold on exports.
"This is speculating, no one can make this kind of estimation of the trademarks," Mazur said. Other estimates have placed the value at less than $100 million, he said.
"They are saying this to force Parliament to change the law," Mazur said. "It's better to say $400 million. The government will take it more seriously."
Last November, three parliamentary commissions kicked out a proposal by 36 parliamentary deputies to introduce a clause into the Law on Industrial Ownership that would have passed both domestic and foreign rights back to the Polmos distilleries. Agros argued that Polish law could not affect decisions in foreign countries.
However, without budging from its original stance, in a press release dated Jan. 5, Agros said, "Agros Holding is conscious how important the Polmoses' ownership of the rights to foreign registration of trademarks is for future investors selected in the privatization process. Agros Holding is open to an agreement with the Polmoses."
Although Poland is the world's fourth-largest vodka market after Russia, the United States and Ukraine, the sale of foreign vodka abroad can often be more lucrative than domestic sales. While a half-liter bottle of Zubrowka retails at around zl. 23-zl. 24 on the domestic market, it will retail for five times that value, or about GBP 18, in Great Britain.
Investors looking at the Polmoses said they valued the distilleries for their export potential. "The most important are the (Wyborowa, Zubrowka and Luksusowa) brands in terms of export," said Alberto Cortese, member of the management board at Bacardi Martini Polska. "In terms of vodka, we're lacking a major international vodka brand" to add to other recent acquisitions it has made, such as Bombay Sapphire gin.
"We are as interested as everyone who is interested," Cortese said. But "the Agros problem is very important."
