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Friday, 27 July, 2001, 11:57 GMT 12:57 UK
Poland's top vodka brand for sale
Zubrowka logo
Zubrowka was Leonid Brezhnev's favourite vodka
The firm that makes Zubrowka, Poland's legendary bison-grass vodka, is up for sale.

The Polish government announced it was in talks with four unnamed firms, both foreign and domestic, for the sale of an 80% stake in Polmos Bialystok.

Polmos, whose brands include Absolwent vodka and a range of spirits, as well as Zubrowka, is Poland's biggest distiller, with a 25% market share.

Speculation in the Polish business press has pointed to Britain's Allied Domecq, and a consortium of Germany's Eckes and Swedish Vin & Spirt as potential buyers.

There has also been talk of a bid from French drinks giant Pernod Ricard, which bought Poland's second-biggest distiller, Polmos Poznan, earlier this month.

Pernod Ricard is the European distributor for Zubrowka.

But a Pernod bid would almost certainly run into problems with Poland's competition authorities.

Taste the bison

Zubrowka, which is famous for its distinctive herbal flavour and the stem of bison grass that each bottle contains, was a lucrative export product during the communist period.

A bison
A surprisingly nice flavour for vodka

It even gained the dubious distinction of being the favourite drink of Soviet premier Leonid Brezhnev.

In recent years, it has bounced back into fashion, as Western drinkers have acquired a taste for exotic vodkas.

But its crucial domestic market has been hammered, with most younger Poles increasingly preferring beer and imported drinks.

Poles drink 100m litres of vodka a year, but volumes have been stagnant for the past few years.

The market has also been battered by home brewing and rampant smuggling of cheaper spirits from Russia, Belarus and Ukraine.

Weak vodka

The weak Polish vodka market is likely to make a Polmos sale problematic.

The government cancelled a previous tender for the firm, when it failed to receive a satisfactory bid.

Polmos Bialystok made a profit of 39m zlotys (6.5m; $9.3m) last year.

But while the firm is seen as healthy, sell-off plans could be harmed by the government's insistence on selling all of the country's 21 distilleries at the same time.

So far, only one has been sold - Pernod's purchase of Polmos Poznan.

Of Poland's more than 200 brands of spirit, only half-a-dozen are believed to be viable in the long term.

The Polish government sold off almost all the country's breweries and other drinks firms in the mid-1990s.

See also:

02 May 01 | UK Politics
Whisky report makes short measure
10 Feb 01 | From Our Own Correspondent
Tequila's new sunrise
04 Nov 00 | Europe
Vodka wars in Moscow
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