In pursuit of the luxury drinker

WHEN Diageo snapped up Turkish drinks maker Mey Içki for £1.3bn last month, this column welcomed the deal but called for more acquisitions outside the firm’s mature western European and North American markets. “An aperitif is all well and good,” we said. “But Paul Walsh needs to tuck in.” Alas, we can’t claim to have known he would strike again so quickly, this time plumping for Stock Spirits, the premium Polish spirits maker, although he is right to do so.

The reasons for this offer are less clear-cut than the Turkish buyout, which offered a popular local brand as well as a large distribution network in a relatively immature market. Poland, of course, is no stranger to Vodka, but sales of Diageo’s Polish brand Smirnoff Vladimir have been struggling recently despite a higher marketing spend.

That is partly because of a squeeze on middle market offerings: recession-hit drinkers go for budget brands while upper class boozers opt for newer luxury alternatives. Stock Spirit’s flagship brand Czysta de Luxe – aimed at the top end of the market – is the best selling clear vodka in Poland and one of the fastest growing in the rest of the world, especially America. It should help Diageo win back customers that are looking for something a little more refined.