Diageo to get rid of Malibu

Diageo will sell Malibu rum within the next six months as part of the finalisation of its deal with Pernod Ricard to buy Seagram.

The United States Federal Trade Commission has today finally allowed the two multinationals to aquire the Seagram spirits and wine business.

When the transaction has closed Diageo will own Captain Morgan rum (although this is subject to some dispute), Crown Royal, Seagram’s 7 Crown, Seagram’s VO and Seagram Chateau & Estates wine, together with a number of other key businesses.

The fact that Diageo already owned Malibu worried the FTC. Taking on Captain Morgan would mean the giant company would dominate the US rum market coast-to-coast, owning the two biggest-selling brands in the country.

A press statement said Diageo has entered discussions with a number of parties interested in buying Malibu.

One company with its eye on Malibu could be Allied-Domecq – when it finds out whether it’s going to get hold of Captain Morgan rum or not. Allied forged an alliance with Morgan’s Puerto Rican maker Destileria Serralles, which said in the event of any other company apart from Allied acquiring Seagram – which held distribution rights to Captain Morgan – Serralles would give Allied an option on Captain Morgan.

The case is still going through the Puerto Rican courts and a judgement is hoped for next year. A spokesman for Allied told decanter.com, ‘Allied still have a claim on Captain Morgan rum, so no change until that is decided.’

A spokeswoman for Diageo said, ‘Until we hear otherwise Captain Morgan is treated as if it is our brand.’

The FTC announcement comes exactly a year after Pernod and Diageo first beat off rivals to buy the Vivendi-owned Seagram drinks business for US$18.5bn.