Coca-Cola HBC to acquire Finlandia vodka from Brown-Forman

Coca-Cola HBC has revealed it is set to acquire the Finlandia vodka brand from Brown-Forman for US$220 million .

Speaking to the drinks business, Coca-Cola HBC said: “Brown-Forman will continue to be a key strategic partner for us, as we separately distribute their portfolio in several of our markets. As the distiller and bottler of Finlandia Vodka, Anora will continue this strategic role for Coca-Cola HBC.”

Additonally, regarding the sale, industry sources have rumoured that the union signals that a “vodka and Coke RTD is an obvious route”.

The acquisition, which is subject to regulatory approvals, will see the Nordic wine and spirits brand house, Anora — the global distiller and bottler of Finlandia vodka and also the distributor of Finlandia vodka in Finland, Sweden and Norway — enter into a strategic long-term agreement with Coca-Cola HBC.

Anora’s reign as the global producer of Finlandia vodka, covering distillation and bottling is currently in a long-term production services agreement that runs until 2035, however the brand was sold by former Altia (today known as Anora) to US-based Brown-Forman Corporation in multiple phases, from 2000 to 2004.

As a brand, Finlandia was established in 1970 and is one one the leading vodkas in Central and Eastern Europe with annual volumes of 2.7 million 9L cases globally, of which more than 60% are being generated within Coca-Cola HBC’s geographic footprint.

Pekka Tennilä, CEO of Anora Group Plc said: ”Finlandia vodka, produced by Anora from the pure natural ingredients of Finnish barley and water, is an important part of Anora’s history and heritage, first as brand owner and later as the producer for global markets pursuant to a strategic partnership with Brown-Forman.”

Zoran Bogdanovic, CEO of Coca-Cola HBC, explained: “Having been associated with the distribution of Finlandia for 17 years in several markets, we are excited by this unique and regionally relevant opportunity that will support the acceleration of our on-premise business across more of our markets. The proven complementarity of our premium spirits business with our strong NARTD portfolio enables us to offer solutions for a broad range of 24/7 consumption occasions, particularly socialising moments. We view this as an attractive investment and a natural evolution of our role as one of Finlandia’s distribution partners, further attesting to the strength of our time-tested and wide-ranging partnership with Brown-Forman. We appreciate the trust placed in us and look forward to creating more value for our partners and customers by capturing new opportunities with our well-rounded beverage portfolio.”

Lawson Whiting, CEO of Brown-Forman, revealed: “We are pleased to pass on the ownership torch of Finlandia to Coca-Cola HBC, who has proven to be a strong and reliable partner to our brands for more than 17 years. We believe Coca-Cola HBC is well-suited to support Finlandia’s future stages of development. I am confident that Coca-Cola HBC’s growth ambitions and capabilities in premium spirits, its critical mass and executional excellence, coupled with its leading sales and distribution credentials in the markets where it operates, will accelerate Finlandia’s growth trajectory.”

Industry sources close to the scene have additionally queried whether there is a bigger plan afoot with this new deal and implied that it is quite likely Brown-Forman will not offload Finlandia but instead use the new collaboration to its advantage as the companies work well alongside one another. They begged the question: “But will Finlandia remain in the Brown-Forman distribution portfolio? Probably, as the links between the two companies get closer.”

Tennilä added: “We look forward to continuing and deepening the strategic partnership with Coca-Cola HBC.”