Background of the company

In the late 1910s, the government of Sweden realized that they needed to take steps in

monitoring the country's liquor trade; to the awakening of the prevailing trend of excessive

alcohol consumption in the society which is the consumption of aquavit and brandy was

increasing alarming. The government primarily wanted to combat the social ills caused by

alcoholism and also, wanted to channelize the revenues generated from alcohol sales towards

social activities.

The government also introduced an 'alcohol ration system,' under which every citizen

above the age of 20 was given an 'alcohol ration book.' People were given a fixed quantity of

alcohol per month on presenting their alcohol ration book at retail and wholesale alcohol stores.

However, alcoholism continued to increase in Sweden and reached epidemic proportions by

1919.

In 1917, the V&S group was founded as an International producer and distribution for

alcoholic beverages. It was headquartered at Stolkholm, Sweden with the employment of 2500

people to work. Until 1994, the group had the position of a national monopoly for production and

distribution, but it was abolished when Sweden joined the European Union in 1995. And in the

year 2008, in March, the group had been announced by the Swedish Government that they are

selling the group to Pernod Ricord for 5.626 billion euro, which is 55 billion Swedish Kronor

( RM 24.281 billion).

The production of the group's international spirits takes place in Sweden, Denmark, Great

Britain, and St. Croix, U.S. Virgin Islands. Production of their local and regional spirits takes

place primarily in Sweden, Denmark, Finland, Germany, and Poland. In Northern Europe, V&S

Group is the largest importer and distributor of wine. The group offers their own brands of wine

and also produces brands by well-known international companies.

Distribution in the Nordic area is primarily handled through the group's distribution

centers in Sweden, Denmark, and Finland. V&S Group is represented by the subsidiary V&S

Norway in Norway, by V&S Eesti in Estonia, and by the company V&S Luksusowa Zielona

Góra in Poland. In the United States, distribution is handled by Future Brands, of which the

group owns a 49% share. In most other regions of the world, distribution is handled by

Maxxium, also partly owned by the group. About three-quarters of the group's sales come from

spirits, whereas the remaining quarter comes from wine. Vodka is their largest selling spirit, in

which Absolut holds the highest sales figures.

Absolut Vodka

Absolut Vodka is a brand of vodka, produced near Åhus, Skåne, in southern Sweden.

Since March 2008, the company has been owned by the French firm Pernod Ricard, having been

sold by V&S Group, which is owned by the Swedish government. Absolut is the third largest

brand of alcoholic spirits in the world after Bacardi and Smirnoff, and is sold in 126 countries.

Absolut Vodka was established in 1879 by Lars Olsson Smith and is produced in Åhus,

Sweden. Smith introduced fractional distillation that produces liquor without fusel alcohol in

Sweden in 1877, under the name "Tiodubbelt Renadt Brännvin" (Tenfold Purified Vodka).

Brännvin literally means "burn-wine" and is analogous to the German "Branntwein". The term is

also used in Norwegian, Danish and Icelandic. ("Vodka" was not used for Swedish liquor until

1958, with the potato-based Explorer Vodka.)

The name was changed to "Absolut Rent Brännvin" (Absolutely Pure Vodka) by Smith to

market his much improved product. Smith challenged the city of Stockholm's liquor marketing

monopoly with his vodka. It was sold at a lower price than the monopoly's product, just outside

the city border. Smith even offered free boat rides to the distillery and "Rent Brännvin" made

Smith a fortune. In 1917, the alcohol industry in Sweden was monopolized by the Swedish

government.

Vodka was then sold nationwide under the name "Absolut Rent Brännvin". The name

changed with intervals, Renat Brännvin or Absolut Rent Brännvin. In 1979, the old name

Absolut was picked up when the upper-price range Absolut Vodka was introduced. Renat is still

a euphemism for spirits in Sweden, and the name of another vodka product by Vin & Sprit.

Absolut Vodka was introduced to the global market in 1979. Since its launch, Absolut

has grown from 90,000 liters to 96.6 million liters in 2008. It has become the fourth largest

international spirit and is available in 126 countries. The vodka is made from winter wheat.

Approximately 80,000 metric tons (2,900,000 bushels) of wheat is used annually to produce

Absolut Vodka. Over one kilogram of grain is used in every one-liter bottle.