YEREVAN (RFE/RL)–The Armenian government and Pernod Ricard group on Wednesday put the final seal on the French firm’s acquisition of the Yerevan brandy factory in a $30 million deal.
Pernod Ricard in 1998 won an international tender for the Yerevan Brandy Company that produces the famous Armenian cognac. The deal triggered a major controversy in Armenia–with many critics saying that the sell-off price was too low. The opposition unsuccessfully tried to annul it in parliament.
Yerevan Brandy Company’s formal hand over–originally expected last December–was postponed for six months as the French requested more time for deliberations. Pernod cited the economic crisis in Russian–the main market for the Armenian brandy–and "local statutory and administrative uncertainties."
"These uncertainties no longer exist," Pernod Ricard’s president–Thierry Jacquillat–said in a statement. "Moreover–Armenian brandy markets will progressively retrieve their volumes and levels of profitability," he said.
At an official ceremony in Yerevan–Jacquillat and senior Armenian officials signed a "conclusive agreement" on the brandy factory acquisition. Earlier in the day–they were present at the hand over to Pernod of Yerevan Brandy Company’s ceremonial keys. The Armenian and French national flags were then hoisted at the factory building.
Known as the favorite drink of Winston Churchill–the British wartime leader–Armenian cognac was renamed "brandy" at the insistence of the French. Last month the government legally guaranteed Pernod’s exclusive rights to the brand–in line with the firm’s demand.
"We are optimistic regarding the prospects for international development of YBC’s bran’s–whose quality appeals to brandy connoisseurs around the world. It is for this reason that we have brought forward the decision to take over this Company," Jacquillat said.
Pernod Ricard ran’s as the world’s fifth largest producer of wines and spirits–with annual sales totaling some $4 billion–most of them outside France.