Diageo and The Nolet Group Form Company for Ketel One Vodka

Food & Beverage Close-Up, June 11, 2008

FOOD AND BEVERAGE CLOSE-UP-11 June 2008-Diageo and The Nolet Group Form Company for Ketel One Vodka(C)2008 - CloseUpMedia - newsdesk@closeupmedia.com

Diageo, a spirits, wine and beer company, and The Nolet Group, the family-owned distiller of Ketel One Vodka, announced they have completed a transaction to form a new 50-50 company that will own the perpetual exclusive global rights to sell, market and distribute super-premium Ketel One Vodka and Ketel One Citroen.

Diageo paid $900 million for its 50 percent equity stake in the new company, which will be based in the Netherlands. The Nolet family will continue to own the distillery in Schiedam, Holland, and will supply Ketel One Vodka and Ketel One Citroen to the new company. Due to its rights under the agreements, Diageo will fully consolidate the financial results of the new company, accounting for the Nolet holding as a minority interest.

"This transaction further enhances Diageo's platform in the fast-growing super-premium vodka segment," said Paul Walsh, Chief Executive, Diageo. "Ketel One Vodka is an outstanding high quality brand rich in heritage. In joining with the Nolet family, we are eager to bring our outstanding marketing expertise and strong track record of brand stewardship to Ketel One Vodka to maximize its potential for global growth."

"We are extremely proud of what we've achieved building the Ketel One Vodka brand. It's a testament to the power of our unique approach and the appeal of our brand's heritage," said Carel Nolet, Sr. Chairman of The Nolet Group. "This alliance with Diageo is key for The Nolet Group and the Ketel One brand because we will now have sales, marketing and distribution expertise that will help us to build on our success and make Ketel One Vodka a truly global brand."

In 2007 Ketel One Vodka and Ketel One Citroen had a combined annual volume of 1.9 million cases. It is sold primarily in North America in the super-premium vodka segment and will complement Diageo's premium Smirnoff and its ultra-premium Ciroc brands. Similarly, outside the United States Ketel One Vodka will expand Diageo's brand range in vodka.

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