Miller forms partnership with Allied Domecq - Miller Brewing Co - Brief Article

Modern Brewery Age, Jan 28, 2002

Allied Domecq PLC and Milwaukee-based Miller Brewing Company last week announced a commercial partnership to introduce a range of new alternative malt beverages, the first two of which will be based on Allied Domecq's popular Stolichnaya vodka and Sauza tequila. These new drinks will be shipped to retail through the Miller's distributor network. Both parties said they will "explore further opportunities utilizing the Allied Domecq portfolio of core spirits brand."

The move marks a further linkage between U.S. brewers and distillers, two groups that have been historically at odds over tax differentials and advertising restrictions.

"We will be the only player with a strong, premium brand presence across multiple categories of ready-to-drink malt beverages that legal-drinking-age consumers are demanding, thereby accelerating the fastest-growing segment of the industry," said Philip Bowman, Allied Domecq's Chief Executive. "By leveraging Miller's production capabilities, its broad distribution system and strong sales and marketing organization, and capitalizing on the strong brand equity of our products-beginning with Stolichnaya and Sauza--we are moving into this category in an innovative way."

He added, "We intend to be a major player and we're confident our intent to establish leadership in this category will be met with enthusiasm and success. Our beverages will be a hit with adult consumers."

"Allied's premium portfolio of brands represents a strong opportunity to provide our distributors and retailers a tremendous range of new tastes and choices to offer to consumers," Miller's CEO, John Bowlin, said. "I look forward to adding the Allied Domecq branded products to our portfolio in the company of leading brands Miller Lite, High Life and Genuine Draft. Miller's distributors will have the benefit of developing and winning in the category with great brands that promise to create broad, established adult consumer appeal."

Executives reported that the new Stolichnaya and Sauza ready-to-drink malt beverage products will be produced and distributed by Miller in the U.S. and available to consumers in late spring. The companies will initially invest up to $50 million in development, launch activity and marketing of these trademarks.

"Allied Domecq's portfolio of premium brands appeals to a diverse range of adult consumers and drinking occasions. Making these brands available as an alternative malt beverage will enable legal-drinking-age consumers to enjoy them in a wider range of occasions," Allied Domecq's Bowman said. "Our research indicates a strong appeal with adult consumers for these new flavors in alternative malt beverages. We will support our brands with strong advertising and creative marketing for both on and off premise."

Allied Domecq Spirits & Wine North America is a division of Allied Domecq PLC, a firm that calls itself" a dynamic, marketing-led brands business, which operates globally in spirits and wine and quick service restaurants." Leading Allied Domecq North American brands include Stolichnaya Vodkas, Sauza Tequilas, Canadian Club, Courvoisier, Maker's Mark, Beefeater Gin, Kahlua and the Hiram Walker Liqueurs.