Absolut Busch?

As A-B plots spirits moves, Swedish distiller might be up for sale.

Will Anheuser-Busch buy Vin & Spirit, the Swedish distiller of Absolut vodka?

While such a deal is currently only grist for the rumor mill, a potential merger would be driven by a confluence of events.

A-B, which has struggled to find avenues for growth, hasn't made it a secret that it wants to get into the spirits category. It got its toes wet last year by rolling out two liqueur products.

In June, A-B President August Busch IV said if beer continued to lose share of alcohol-beverage volume the company “will have to reevaluate our business model going forward, expanding beyond beer and broadening our position within the total alcohol industry.”

Busch reiterated that position during a meeting held with A-B distributors at this week’s National Beer Wholesalers Association conference, according to Beer Business Daily (subscription only).

Busch also showed that beer is continuing to lose drinking occasions and share to wine and spirits at an alarming rate, which seems to indicate that A-B will eventually enter that space with either acquisitions or new products, or both. We expect news out of A-B of some kind soon.

Meanwhile, a change in government in Sweden might put V&S into play. An alliance of center-right parties that was elected on Sept. 17 is committed to selling state assets. V&S, which is wholly owned by the Swedish government, might be among the companies put on the block. No formal plans have been announced yet.

Buying V&S and owning Absolut -- which is the world’s fifth-biggest spirits brand with 9 million case sales -- would immediately establish A-B as a player in the spirits business. Besides Absolut, V&S markets brands including Cruzan rum and Plymouth gin.

In another potential scenario, V&S might go public and A-B could acquire a significant equity stake and tap into spirits that way (just as it benefits in the growth of Corona Extra thanks to its equity stake in the brewer Grupo Modelo).

A report by Dresdner Kleinwort, meanwhile, cited a number of spirits marketers as potential buyers, according to a report in Just-Drinks. Fortune Brands, with which V&S has distribution partnership, is seen as the frontrunner. Other potential bidders include Brown-Forman, Constellation Brands, Bacardi, and Pernod Ricard.