July 18, 2007


Absolut Capitalism (Eric Roston Wednesday, July 11, 2007 , American)

Absolut Vodka is manufactured by the V&S Group. The company, you might assume, is the one that got away from the industry giants, an ornery and obscure private firm that distills grain into money. Behemoths of the spirits industry stamp across newspaper front pages every couple of years. Diageo or Pernod Ricard or Bacardi pick off valuable competitors as easily as you might coax an olive off a tiny plastic saber with your front teeth. V&S, you figure, is the one they just missed.

Except that the V&S Group is a public company in the fullest sense of the word, a wholly owned subsidiary of King Carl XVI Gustav and the people of the constitutional monarchy of Sweden. Now, however, the new leaders of Sweden’s government are eager to get out of the spirits business—and other businesses as well. V&S has been valued at $5.7 billion by research analysts, and while no one knows the accuracy of that particular figure, a sale would be highly enriching to the Swedes. It would amount to fully 2 percent of their annual gross domestic product, or more than $600 per person. (Imagine a government-owned U.S. company worth $180 billion.)

In March, the center-right coalition led by Fredrik Reinfeldt asked Parliament for permission to sell holdings in half a dozen industries, signaling a change in Swedish economic policy and the start of a race for the Absolut jewel in the king’s crown. Details have not been revealed yet. The ideological push to get out of key industries (the state owns 55 groups employing 190,000 people, or about 4 percent of the workforce) has, for months, triumphed over the mechanics for how to do so. In coming weeks, Parliament is expected to vote on the privatization request, and a sale is not expected before autumn at the earliest.

Posted by Orrin Judd at July 18, 2007 12:00 AM
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