The company said in a news release earlier this month that its business in France has grown depletions, or the amount distributors sell to retailers, at a double-digit annual rate since 2005. Brown-Forman also has fully owned sales and marketing operations in the United States, Germany, Australia, Poland, Mexico, China, South Korea, Brazil, the Czech Republic and Taiwan.
The Louisville-based company produces alcoholic beverages, including Jack Daniel’s Tennessee Whiskey, Southern Comfort, Finlandia, Korbel, Gentleman Jack, el Jimador, Sonoma-Cutrer, Chambord and Woodford Reserve.
Brown-Forman’s arrangement with current distributor Bacardi Martini France will conclude in December 2013.
“Brown-Forman has had a long and successful relationship with Bacardi Martini France, and we thank them for their valued contributions on our behalf in France,” Mark McCallum, Brown-Forman president for Europe-Africa-Asia/Pacific and duty-free business, said in a news release.
He said Brown-Forman and Bacardi continue to benefit from strategic partnerships in a number of important markets, including the United States and United Kingdom.
“France is the world’s third largest whiskey market, and our Jack Daniel’s trademark has been enjoying significant growth as French consumers evolve their whiskey preference from scotch to American whiskey,” McCallum said in the release.
“We believe that establishing our own distribution company in France will further the growth of the Jack Daniel’s trademark and, additionally, support the development of our broader premium brand portfolio in this important market. In addition, this move will contribute to our strategic goal of continuously improving our brand-building capabilities and in-market knowledge and influence across the globe.”
In other Brown-Forman news, a week later, the company announced that it will redeem on or about Feb. 25, 2013, all of its outstanding $250 million 5 percent Notes due in 2014 by exercising a “make-whole” call provision provided for in the notes. Brown-Forman will use a combination of cash and short-term borrowings to fund the redemption.
As a result, the company expects to record in its fourth fiscal quarter pre-tax expenses associated with the redemption of approximately $9 million. The redemption is expected to lower pre-tax interest expense by approximately $2 million in the fourth quarter of fiscal 2013 and $8 million in fiscal 2014.