Winnipeg Free Press
Saturday, December 22, 2001
By Geoff Kirbyson
Maple Leaf Distillers has signed an agreement with Pernod Ricard International that is expected to create 69 new jobs in the province over the next two years.
The deal with the third-largest spirit and wine manufacturer and distributor in the world will lead to a $6.4-million expansion of the Winnipeg firm's facilities and equipment, making it the largest Canadian-owned distillery in the country.
Costas Ataliotis, president of two-year-old Maple Leaf, said the deal will result in a tenfold increase in the company's revenues over the next 18 months. Revenues are expected to jump from the currrent $5 million to more than $50 million.
"It puts us on an entirely different level. We'll be on an international plateau in recognition," Ataliotis said in an interview. Under the terms of the agreement, Pernod Ricard will be the exclusive distributor of Maple Leaf Products throughout Canada, while Maple Leaf will be Pernod Ricard's exclusive manufacturer of Pernod Ricard products in Canada. Maple Leaf also will be Pernod Ricard's Canadian distribution hub, and the two will work together to develop new products that will be distributed throughout Canada and eventually the world.
Ataliotis said Maple Leaf's initial projections called for the 69 jobs to be added over five years, but the Pernod Ricard deal has likely sped up the process by three years.
Pernod Ricard Canada's parent company is based in France. Its lineup of liquors includes Jameson Irish Whisky, Havana Club rum, Wild Turkey bourbon and Seagram's Coolers. Maple Leaf produces 125 varieties of cream and regular liqueurs and spirits, including Platinum Vodka, Cueva Vieja Tequila and Norm's Lemon Moonshine.
David Wolinsky, chairman of Protos International Inc., Maple Leaf's parent company, said Pernod Ricard's cachet will provide a significant boost.
"Who's going to say no to them? We'll get higher usage and greater shelf space because of them. It's like having Wal-Mart distribute your product instead of a local convenience store," he said in an interview.
Armando de Medeiros, president of Pernod Ricard Canada, said the partnership with Maple Leaf was a perfect fit for his company because it can take advantage of Maple Leaf's production capabilities and know-how while it focuses on sales and marketing.
"We didn't want to acquire a manufacturer; it's a different beast to manage," he said in an interview.
He said Winnipeg's central location is ideal for shipping across Canada.
"It's much better for us to be here than in Vancouver or Nova Scotia," he said.
Crocus Investment Fund announced it has invested $1.8 million in Maple Leaf to finance part of the expansion, on top of the $1-million investment it made in March last year.
James Umlah, chief investment officer for the province's largest labour-sponsored fund, said the growth track of Maple Leaf "accelerated immediately" with the Pernod Ricard announcement.
Maple Leaf is now poised to be one of the top-performing companies in Crocus's portfolio, he said, with an expected growth rate of between 30 and 40 per cent.
"I would anticipate further investments (from Crocus)," Umlah added in an interview.
Premier Gary Doer announced that the Manitoba government is providing a loan of $1.5 million under the Manitoba Industrial Opportunities Program (MIOP) to support Maple Leaf's expansion.
The secured loan will be provided at ultra-low government interest rates, but if Maple Leaf fails to meet its job targets, it will be subject to an interest penalty. Doer said he doesn't expect that to happen.
"We feel very secure about this secured loan. These are not people who just put up a shingle last week," he said in an interview.
The remaining $3.1 million required will be provided by Maple Leaf shareholders, including Winnipeg Goldeyes owner Sam Katz, lawyer Hersh Wolch, and former Winnipeg Jet Thomas Steen.
As part of the agreement, Maple Leaf has taken possession of its new 100,000-square-foot premises -- the former National Healthcare building -- in Murray Industrial Park. The facility is 10 times the size of its previous home on McPhillips Street.
Maple Leaf Distillers was established as an independent distillery in 1999.
geoff.kirbyson@freepress.mb.ca