Absolut Vodka

Con Constandis, CEO of Corby's, said: "I am very excited about adding an iconic brand like Absolut vodka to the Corby portfolio and even more pleased that we have been able to leverage our successful track record and relationship to secure a long-term deal. We had been seeking to add a global brand, particularly in the premium vodka segment, but were constrained by our size and resources, so the opportunity to represent Absolut vodka in Canada fits perfectly with our strategy."

http://www.datamonitor.com

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ADDRESSES: Interested parties are invited to submit written comments. Comments should refer to "Pernod Ricard, File No. 081 0119," to facilitate the organization of comments. A comment filed in paper form should include this reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission/Office of the Secretary, Room 135-H, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. Comments containing confidential material must be filed in paper form, must be clearly labeled "Confidential," and must comply with Commission Rule 4.9(c). 16 CFR 4.9(c) (2005). *1 The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments that do not contain any nonpublic information may instead be filed in electronic form by following the instructions on the web-based form at http://secure.commentworks.com/ftc- Pernod. To ensure that the Commission considers an electronic comment, you must file it on that web-based form.

*1 The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission's General Counsel, consistent with applicable law and the public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).

The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. All timely and responsive public comments, whether filed in paper or electronic form, will be considered by the Commission, and will be available to the public on the FTC website, to the extent practicable, at www.ftc.gov. As a matter of discretion, the FTC makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC website. More information, including routine uses permitted by the Privacy Act, may be found in the FTC's privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).

FOR FURTHER INFORMATION CONTACT: Joseph S. Brownman, FTC Bureau of Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580, (202) 326- 2605.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and [Section] 2.34 of the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for July 17, 2008), on the World Wide Web, at (http://www.ftc.gov/os/2008/07/index.htm). A paper copy can be obtained from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580, either in person or by calling (202) 326-2222.

Public comments are invited, and may be filed with the Commission in either paper or electronic form. All comments should be filed as prescribed in theADDRESSES section above, and must be received on or before the date specified in the DATES section.

Analysis of Agreement Containing Consent Orders to Aid Public Comment

I. Introduction

The Federal Trade Commission ("Commission") has accepted, subject to final approval, an Agreement Containing Consent Orders ("consent agreement")from Respondent Pernod Ricard S.A. ("Pernod Ricard") in connection with its proposed acquisition of V&S Vin & Sprit AB (Publ)("V&S") from The Kingdom of Sweden. Among other things, the consent agreement requires that Pernod Ricard, currently the distributor of Stolichnaya Vodka, as a condition to acquiring V&S and its Absolut Vodka brand, cease distributing Stolichnaya Vodka. Pernod Ricard obtained the rights to distribute the Stolichnaya Vodka brand from its owner, Spirits International BV ("SPI"), a corporation headquartered in Geneva, Switzerland, and organized and doing business under the laws of The Netherlands. Absolut Vodka and Stolichnaya Vodka are "super premium" vodkas and, for a substantial number of consumers, they are close price substitutes. Total annual United States retail sales of these two brands are about $1.9 billion.

The Commission and Respondent Pernod Ricard also have agreed to entry of an Order To Hold Separate and Maintain Assets ("Hold Separate Order"). The Hold Separate Order requires Pernod Ricard to maintain the competitive viability of assets relating to the distribution of Stolichnaya Vodka during the six-month period that the consent agreement permits it to own Absolut Vodka while also distributing Stolichnaya. The Hold Separate Order further requires that Pernod Ricard refrain from exercising direction or control over the Stolichnaya Vodka distribution business. Pernod Ricard must nevertheless maintain all Stolichnaya Vodka operations in the regular and ordinary course in accordance with past practices. Compliance with the terms of the Hold

[Page Number 42811]

Separate Order will be supervised by an interim monitor.

The proposed consent agreement will also remedy information exchange concerns in four additional distilled spirits markets: Cognac, domestic cordials, coffee liqueur, and popular gin. The Commission's concerns in these four markets arise because of an ongoing joint venture between V&S and Beam Global Spirits & Wine, Inc. ("Beam Global"), a Fortune Brands, Inc., subsidiary, for the joint management of all of their distilled spirits distribution businesses. After the acquisition, Pernod Ricard will assume the management function role held by V&S for the joint venture brands and have access to competitively sensitive information about Beam Global brands which compete with Pernod Ricard brands that are not in the joint venture. The consent agreement requires Pernod Ricard to set up strict procedures that limit the flow of information to its employees, both within the joint venture as well as within Pernod Ricard itself. Because neither party to the joint venture profits from actions by the joint venture in connection with the sale of products, the Commission does not believe that a structural remedy in the form of a required divestiture of Pernod Ricard's brands that compete with the Beam Global brands in the joint venture is necessary. Total annual United States retail sales in the four markets combined are about $2.4 billion.

II. Respondent Pernod Ricard

Respondent Pernod Ricard is a corporation organized, existing and doing business under and by virtue of the laws of the French Republic, with its office and principal place of business located at 12, place des Etats-Unis, 75783 Paris Cedex 16, France. In the United States, Pernod Ricard operates through a wholly-owned subsidiary corporation, Pernod Ricard USA, Inc., with offices located at 100 Manhattanville Road, Purchase, New York 10577. Pernod Ricard's United States revenues from all distilled spirits products in the year ending June 30, 2007, totaled about $2.5 billion.

Pernod Ricard produces distilled spirits that it distributes, markets, and sells in the United States. Some of its more popular brand lines of distilled spirits are Martell Cognac, Hiram Walker Cordials, and Kahlua Coffee Liqueur. Pernod Ricard also produces, markets, distributes, and sells, Chivas Regal, Ballantine's, The Glenlivet Scotches, Jameson Irish Whiskey, Beefeater Gin, and the line of Wild Turkey Bourbons. Pernod Ricard also markets, distributes, and sells, but does not produce or own, the line of Stolichnaya Vodkas.

III. V&S (the acquired company)

V&S is a corporation wholly-owned by The Kingdom of Sweden, and is organized, existing and doing business under and by virtue of the laws of The Kingdom of Sweden. Its office and principal place of business is located at Formansvagen 19, S-100 74, Stockholm, Sweden. In the United States, V&S operates its distilled spirits business through a wholly-owned subsidiary, The Absolut Spirits Company, Incorporated ("ASCI"). ASCI is a Delaware corporation with its office and principal place of business located at 401 Park Avenue South, New York, New York 10016. V&S produces and sells distilled spirits products from facilities that it owns and operates. The brands of V&S include the lines of Absolut Vodka, Level Vodka, Plymouth Gin, and Cruzan Rum. V&S's United States revenues from all distilled spirits products in 2007 were about $800 million.

IV. The Future Brands Joint Venture

Future Brands LLC ("Future Brands") is the joint venture corporation of ASCI and Beam Global. Future Brands is a Delaware corporation with its office and principal place of business located in the offices of Fortune Brands at 300 Tower Parkway, Lincolnshire, Illinois 60069. Future Brands distributes all of the distilled spirits products of ASCI and Beam Global in the United States. The Future Brands joint venture corporation was created in 2001 and under the terms of that agreement, is scheduled to end in 2012. Future Brands had total revenues, in 2007, of about $1.48 billion.

The brands of Beam Global include: the lines of Courvoisier Cognac; DeKuyper Cordials; Starbucks Coffee Liqueur; Jim Beam, Knob Creek, Bakers, Basil Hayden, and Booker's Bourbon; Laphroig and Teacher's Scotch; and Gilbey's Gin. Beam Global and ASCI sell distilled spirits that fall into different marketing and price point segments.

The principal economic benefit to Beam Global and ASCI of their Future Brands joint venture is cost savings or efficiencies from the joint marketing, selling, and distribution of their products. The economic benefit from the actual sale of the products that are distributed by the Future Brands joint venture are maintained by Beam Global and ASCI, as brand owners, and not by Future Brands.

V. The Transaction

On March 30, 2008, Respondent Pernod Ricard and The Kingdom of Sweden entered into their Share Purchase Agreement Regarding the Shares in V&S. Under the terms of the acquisition agreement, Pernod Ricard will acquire all of the shares of V&S for a sum equal to a combination of euros, dollars, and interest payments totaling approximately $9 billion.

VI. The Complaint and Competitive Effects

A. The Stolichnaya - Absolut Overlap in the "Super Premium" Vodka Segment

The Commission also made public a Complaint that it intends to issue. According to that Complaint, Pernod Ricard, with Stolichnaya Vodka, and V&S, with Absolut Vodka, are direct and significant competitors in the super- premium vodka segment. The Complaint further alleges that Stolichnaya Vodka and Absolut Vodka are vodka brands that are close substitutes for a substantial number of customers of these brands.

The proposed acquisition raises competitive concerns because it would eliminate substantial competition between Pernod Ricard and V&S in connection with the distribution, marketing, and sale of Stolichnaya Vodka and Absolut Vodka. If Pernod Ricard owns Absolut Vodka while also being the distributor of Stolichnaya Vodka, it could profitably raise the price of either Absolut Vodka or Stolichnaya Vodka. Many consumers who would be unwilling to pay a higher price for the brand whose price was increased would switch to the other brand. In its Complaint, the Commission stated it has reason to believe that the proposed transaction would have anticompetitive effects and violate Section 7 of the Clayton Act and Section 5 of the Federal Trade Commission Act.

B. The Pernod Ricard-Beam Global Brand Overlaps and the Future Brands Joint Venture

The Complaint also alleges that the proposed acquisition by Respondent Pernod Ricard of V&S may substantially lessen competition in four additional distilled spirits markets. In these markets--Cognac, domestic cordials, coffee liqueur, and popular gin--Pernod Ricard has brands that compete with the Beam Global brands that are distributed by Future Brands. Before its acquisition of V&S, Pernod Ricard had no business relationship with Future Brands. As a marketer, seller, and distributor of distilled spirits products similar to distilled spirits products, marketed, sold, and distributed by Beam Global and Future Brands, Pernod Ricard had

[Page Number 42812]

been a direct and substantial competitor of Beam Global and Future Brands.

After its acquisition of V&S, Pernod Ricard will step into the competitive shoes of V&S (and ASCI) and replace ASCI as a joint venture partner of Beam Global. Pernod Ricard, as a joint venture partner, will have access to competitively sensitive information about Beam Global brands that compete with Pernod Ricard brands that are not in the joint venture, as shown in the following chart:

Market Pernod Ricard Brands Beam Global Brands

Cognac Martell Courvoisier

Domestic Cordials Hiram Walker DeKuyper

Coffee Kahlua and Tia Maria Starbucks

Liqueur

Popular Gin Seagram's Gilbey's

Each of these markets is highly concentrated and difficult to enter. Pernod Ricard and Beam Global are among the two largest suppliers of these spirits in the United States. These companies have spent significant sums of money to create and maintain distinct brand equities.

Beam Global and Pernod Ricard, upon becoming joint venture partners after the acquisition, will share in the management of Future Brands. Under the terms of the joint venture agreement, Pernod Ricard will be required to designate three of its seven member Board of Managers. This will mean that Pernod Ricard employees, in connection with their responsibilities as managers of Future Brands, will have access to competitively sensitive information about all the Beam Global products in the joint venture. These are brands with which Pernod Ricard is now, and after the acquisition will be, in direct and substantial competition. The Commission in its Complaint stated it has reason to believe that if Pernod Ricard obtains competitively sensitive information about the Beam Global brands listed in the table above, the proposed transaction would have anticompetitive effects and would violate Section 7 of the Clayton Act and Section 5 of the Federal Trade Commission Act. The principal anticompetitive effect is likely to be the ability of competitors in each of the four markets, including but not limited to Beam Global and Pernod Ricard, to raise prices by facilitating future potential coordinated interaction.

VII. The Consent Agreement

A. The Stolichnaya - Absolut Overlap in the "Super Premium" Vodka Segment

Under the terms of the consent agreement, to remedy the competitive concerns associated with the Stolichnaya Vodka overlap, Pernod Ricard will not be permitted to have an ownership interest in Absolut Vodka and also keep its rights to distribute Stolichnaya Vodka. Pernod Ricard will therefore be required to divest its interest in distributing Stolichnaya Vodka within six (6) months from the date it acquires V&S. That divestiture will revert back to brand owner SPI.

In the event that Pernod Ricard fails to complete the required divestiture within six (6) months, the Commission may appoint a divestiture trustee to sell the Absolut Vodka assets and business to a Commission-approved acquirer. The principal purpose of this alternative Absolut Vodka divestiture requirement is to give Pernod Ricard significant incentives to comply with the Stolichnaya Vodka divestiture requirements of the consent agreement.

There is one exception to the requirement that Pernod Ricard divest the Absolut Vodka assets and business in the event it fails to comply with the Commission-ordered divestiture relating to Stolichnaya Vodka. If Pernod Ricard by court order is prohibited from divesting its distribution rights to Stolichnaya Vodka, instead of divesting the Absolut Vodka assets, Pernod Ricard would have the option of divesting either (a) the future anticipated income stream from its sales of Absolut Vodka, or (b) a stipulated amount of at least 20% of the gross sales revenue of Absolut Vodka. The reason for this exception relates to the ongoing litigation between SPI and others regarding ownership of the Stolichnaya trademark and related rights to sell vodka under that label. That litigation, which upon agreement with the parties pending their settlement discussions, has been stayed by court order. The Commission has no view on the merits of this private litigation but is concerned that a court possibly may require that the competitive status quo of the distribution of Stolichnaya Vodka be maintained beyond the six (6) month period that the consent order would allow Pernod Ricard to own Absolut Vodka and distribute Stolichnaya Vodka. The income stream divestiture option (or the stipulated 20% or more of gross sales revenue) will be for the time period commencing twelve (12) months after Pernod Ricard will have acquired V&S and continue until Pernod Ricard divests its rights to distribute Stolichnaya Vodka. The purpose of the income stream divestiture requirement is to remove potential incentives on the part of Pernod Ricard to impair the marketability of Stolichnaya Vodka, which because of its closeness to Absolut Vodka, will benefit sales of Absolut Vodka. Because a court order preventing Pernod Ricard from divesting its rights to distribute Stolichnaya Vodka would not have caused willful non- compliance with the divestiture requirements of the consent order, the purpose of the alternative divestiture requirements of the order was to prevent interim competitive harm, rather than incentives to divest Stolichnaya Vodka distribution rights. The Commission believes that the sale of the future income stream of Absolut Vodka under the circumstances of a court order preventing Pernod Ricard from divesting Stolichnaya Vodka distribution rights would eliminate significant incentives on the part of Pernod Ricard from impairing the marketability of Stolichnaya Vodka because Pernod Ricard would not benefit from any increase in the Absolut Vodka income stream during the period of its joint ownership of Absolut Vodka and distribution of Stolichnaya Vodka, having already sold (at a predetermined price) the future value of all income stream benefits.

The consent agreement also requires that Pernod Ricard undertake certain activities to help ensure that the acquirer of the Stolichnaya Vodka assets and distribution business will be able to continue operations in a fully competitive manner. Those requirements include: (a) providing key Stolichnaya Vodka business employees with financial incentives to remain with Pernod Ricard (in order that those employees might then be available for hire by the acquirer); (b) providing lists of key employees to the acquirer; (c) for up to six (6) months, providing such reasonable technical assistance and training as the acquirer may request for the continued distribution of Stolichnaya Vodka; and (d) for up to six (6) months, providing the kinds of back office procedures to the acquirer that Pernod Ricard had already been undertaking for its own purposes.

B. The Pernod Ricard - Fortune Brands Overlaps and the Future Brands Joint Venture

Under the terms of the consent agreement, Pernod Ricard will be prohibited from acquiring any business information of the Future Brands joint venture. To ensure that this will not occur, Pernod Ricard has agreed to the following firewall procedures: (a) the

[Page Number 42813]

Pernod Ricard designees to the Future Brands Board of Managers cannot be officers or directors of Pernod Ricard; (b) Pernod shall recommend to the Future Brands board that it implement database protocols limiting Pernod designated board member access to information about Beam Global brands; and (c) Pernod will allow an interim monitor to supervise all of the firewall- related protections and requirements.

C. The Hold Separate Order

Accompanying the consent agreement is a Hold Separate Order. The purpose of this order, the terms of which Pernod Ricard has also agreed to undertake, is to prevent competitive harm pending the required divestiture of the Stolichnaya distribution agreement, and to ensure that the Stolichnaya Vodka assets required to be divested by Pernod Ricard will remain a competitively viable business. Under the terms of this agreement, Pernod Ricard will be required to (a) hold the Stolichnaya Vodka business separate and apart form all other Pernod Ricard business activities; (b) exercise no direction or control over the Stolichnaya Vodka business; (c) maintain operations of the Stolichnaya Vodka business, including preserving business relationships, in accordance with past practice; and (d) provide the Stolichnaya Vodka business with capital and other funds to operate at current levels and maintain the competitiveness of the business. The agreement also provides for the appointment of an interim monitor. Among other things, the monitor will be empowered to ensure that during the period of time that Pernod Ricard will own the Absolut Vodka line and also distribute Stolichnaya Vodka, that the Stolichnaya Vodka business will be separately managed from the other Pernod Ricard businesses.

VIII. The Opportunity for Public Comment

The Consent Agreement has been placed on the public record for thirty (30) days for receipt of comments from interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the proposed consent agreement and the comments received, and will decide whether it should withdraw from the consent agreement or make final the Decision and Order.

By accepting the consent agreement subject to final approval, the Commission anticipates that the competitive problems alleged in the Complaint will be resolved. The purpose of this analysis is to invite and facilitate public comment concerning the consent agreement. It is not intended to constitute an official interpretation of the consent agreement, nor is it intended to modify the terms of the orders in any way.

By direction of the Commission.

Donald S. Clark

Secretary

[FR Doc. E8-16871 Filed 7-22-08: 8:45 am]

BILLING CODE 6750-01-S

Vol. 73, No. 142

[File No. 081 0119]

Notices

"Through our 'In An ABSOLUT World' campaign, we challenge consumers to imagine their own ideal, and Los Angeles is one of the most idealistic places on earth," said Tim Murphy, Vice President of Marketing, The Absolut Spirits Company, Inc. "For this city-inspired flavor, we wanted to capture the opportunity that LA represents to so many -- reaching for the stars and recognizing their dreams. ABSOLUT LOS ANGELES will evoke an inimitable new 'taste' that honors all the attributes that makes the City of Angels so exclusive and awe-inspiring -- from the stunning packaging to the unique flavor profile, all wrapped inside the iconic ABSOLUT bottle."

First Friend of the Hollywood Walk of Fame

To kick-off the launch, ABSOLUT(R) Vodka is stepping up to be the first donor to the Friends of the Walk of Fame, an initiative to fund the restoration of a cherished Los Angeles icon, the Hollywood Walk of Fame, which will celebrate its 50th anniversary in 2010. ABSOLUT will be the first to receive a "Friend of the Walk of Fame" honorary star on Hollywood Boulevard from the Hollywood Chamber of Commerce, the creators and guardians of the star-studded Walk of Fame that has become a world-famous symbol for Hollywood and the entertainment industry. The Friends of the Walk of Fame honorary star, located at the entrance to the Kodak Theatre, is a tangible recognition of ABSOLUT Vodka's substantial contribution that will be visible to the millions of annual visitors from around the world.

"ABSOLUT Vodka recognized that Hollywood and the Walk of Fame are an enduring legacy for Los Angeles and the entertainment industry. A star in our book, we appreciate its contribution to preserve the Walk of Fame for future generations and applaud it as a visionary corporate leader," said Leron Gubler, president and CEO, Hollywood Chamber of Commerce.

Green Innovation Begins with Green Way LA(TM) Partnership

As part of ABSOLUT Vodka's commitment to supporting the spirit of the city of Los Angeles, ABSOLUT is donating $250,000 from the profits of ABSOLUT LOS ANGELES to Green Way LA(TM), an organization dedicated to restoring nature and natural functions in the city, and encouraging urban residents to "live lightly" to improve the environment, health and welfare of their communities. The donation will be used towards the Green Way LA(TM) 'Green Streets' initiative, which transforms streets, curbs and sidewalks so that rainwater and other polluted water is naturally cleaned before flowing into the Pacific Ocean, and brings beneficial nature back to urban dwellers.

"ABSOLUT Vodka's support allows us to focus on transforming our urban environment to truly make a difference in people's lives," said Larry Smith, Executive Director of Green Way LA(TM). "Green Way LA is leading the way to make the green ideals of 'Los Angeles as the Greenest City' a reality."

5,515 Minutes of Fame

ABSOLUT LOS ANGELES will be toasted with a celebrity-studded, red-carpet event in Los Angeles on Wednesday, July 23, with host Adrian Grenier adding some Hollywood sizzle and DJ Myles Hendrick spinning the hottest tunes out of LA. Spectacular out-of-home executions include an acrylic 20-foot bottle of ABSOLUT LOS ANGELES mounted above Hollywood's iconic KODAK Theatre, which will be donated to Aaron R. Thomas Design to be "upcycled" into furniture, lighting or sculptural pieces with a percentage of the sale of these items going to Green Way LA(TM). An integrated marketing campaign featuring advertisements in national magazines depicts giant bottles of ABSOLUT LOS ANGELES under spotlights with the tag line 'In An ABSOLUT World, LIGHTS, CAMERA, VODKA.'

Furthermore, ABSOLUT has partnered with high-end clothing designer Lisa Kline to create an ABSOLUT LOS ANGELES window display and feature the product in her men's boutique on Robertson Boulevard. Signature cocktails include 'ABSOLUT La La Land' featuring cranberry juice, pomegranate juice and lemon-lime soda, garnished with a squeeze of lime, and 'The Sunset Strip' made with ABSOLUT LOS ANGELES, fresh lime juice, muddled watermelon and cranberry juice. Bottle images and additional ABSOLUT LOS ANGELES cocktail recipes are available upon request. Visit absolut.com/cities for more information and to vote on the next city in this limited-edition series.

About The Absolut Spirits Company, Inc.

The Absolut Spirits Company, Inc., headquartered in New York, is a subsidiary of V&S Group and operates under the auspices of V&S Absolut Spirits in Stockholm, which produces and markets ABSOLUT(R) VODKA, ABSOLUT CUT(TM), Level(TM) Vodka, FRIS(R) Vodka, Plymouth(TM) Gin and Cruzan(R) Rum. The Absolut Spirits Company, Inc. imports ABSOLUT VODKA, Level Vodka, Plymouth Gin and Cruzan Rum in the US and distributes the brands through FutureBrands LLC, a joint venture with Beam Global Spirits and Wine.

About the Hollywood Chamber of Commerce

The Hollywood Chamber of Commerce, representing 1,000 businesses in the Hollywood area, was founded in 1921 and is the second largest chamber of commerce in Los Angeles.

About Green Way(TM)

Green Way(TM) is an L.A. based non-profit organization dedicated to improving our urban way of life by restoring nature's services in Los Angeles and other cities. Through the transformation of city neighborhoods, Green Way restores the natural cycle of water as the catalyst for community-based environmental stewardship. It is as an outgrowth of the long standing L.A. based environmental non-profit, North East Trees.

SOURCE The Absolut Spirits Company, Inc

http://www.absolut.com/cities

The agreement to represent Absolut vodka lifts Corby to number two in the vodka category in Canada with a 25% volume share - combining Absolut with other key vodka brands within Corby's distribution network, such as Polar Ice. The distribution of Absolut vodka is expected to add about $2.5 million annually to Corby's commission income and about $1.2 million annually to net earnings in the first full year. "I am very excited about adding an iconic brand like Absolut vodka to the Corby portfolio and even more pleased that we have been able to leverage our successful track record and relationship to secure a long-term deal. We had been seeking to add a global brand, particularly in the premium vodka segment, but were constrained by our size and resources, so the opportunity to represent Absolut vodka in Canada fits perfectly with our strategy", said Con Constandis, Corby's Chief Executive Officer.

The Corby Board of Directors also announced an amendment to its dividend policy, which will be applicable for the next three years. Subject to unanticipated developments, regular dividends will be paid quarterly, on the basis of an annual amount equal to the greater of 50% of net earnings per share in the preceding fiscal year ended June 30, and $0.56 per share. The previously-announced dividend policy of Corby was to pay quarterly dividends on the basis of an annual amount of $0.56 per share.

Corby has also agreed to continue to participate in the existing mirror netting service agreements with Pernod Ricard's wholly-owned Canadian subsidiaries and Corby's commercial bank regarding Corby's cash surplus for the next three years to October 1, 2011, unless earlier terminated by Corby. Further, during the next three years to October 1, 2011, Corby will not declare any special dividends, repurchase shares or make acquisitions or capital investments outside the normal course of business without the prior approval of Pernod Ricard.

Since the agreement with Pernod Ricard is a related party transaction between Corby and Pernod Ricard, the agreement was approved by the Independent Committee of the Board of Directors of Corby following an extensive review.

Corby's portfolio of owned-brands includes some of the most renowned brands in Canada, including Wiser's Canadian whiskies, Lamb's rum, Polar Ice vodka and Seagram Coolers. Through its affiliation with Pernod Ricard, Corby also represents leading international brands such as Absolut vodka, Chivas Regal, The Glenlivet and Ballantine's scotches, Jameson Irish whiskey, Beefeater gin, Malibu and Kahlúa liqueurs, Mumm champagne, and Jacob's Creek and Wyndham Estate wines.

The existing Voting Class A Common Shares and Non-voting Class B Common Shares of the company are traded on the Toronto Stock Exchange under the symbols CDL.A and CDL.B.

This press release contains certain forward-looking statements relating, but not limited to, Corby's operations and business prospects. Forward-looking information typically contains statements with words such as "anticipate, "believe", "expect" or similar words suggesting future outcomes. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such factors include, but are not limited to economic, competitive and industry conditions. Corby disclaims any responsibility to update any such forward-looking statements.

%SEDAR: 00001138E

SOURCE: Corby Distilleries Limited

CORBY DISTILLERIES LIMITED, Con Constandis, President and Chief Executive Officer,
John Nicodemo, Chief Operating Officer and Chief Financial Officer, Tel.: (416)
479-2400, investors@corby.ca, www.Corby.ca