What you need to know:

• Spirits giant Pernod Ricard is acquiring online whisky retailer The Whisky Exchange (TWE) for an undisclosed sum, to gain access to the fast growing e-commerce space.
• Pernod Ricard has thus far focused largely on growing its portfolio of brands including Jameson, Ballantine’s, and malternatives such as Absolut vodka and Beefeater gin.
• This will not include TWE’s drinks agency Speciality Brands and blender/bottler Elixir Distillers.
• TWE was founded in 1999 by Sukhinder and Rajbir Singh and started out as a corner liquor store, and has grown into the second-largest online whisky retailer, including three physical retail locations and forays into independent bottlings, auctions and private sales.

One of TWE's three physical store fronts. (Image Source: The Whisky Exchange)

Wowza! Deal activity in the whisky world is really heating up. I guess you could say the whisky world is in *good spirits*. 

Off the back of last week’s big news that Diageo is investing a minority stake in Japanese craft distillery Kanosuke Distillery, their first foray into Japanese whiskies, we now have Pernod Ricard taking the whole pie with their acquisition of online whisky retailer The Whisky Exchange (TWE).

To put things into perspective TWE is the second largest online whisky retailer carrying more than 10,000 spirits, with three physical retail outlets in the UK, as well as a very robust independent bottling program, bottling whiskies from casks they’ve purchased under their own labels.

TWE carries more than 10,000 different spirits and spirits-products and has become a mainstay of the spirits industry. (Image Source: The Whisky Exchange)

This is big news. What future could spirits giant Pernod Ricard, of Jameson and Ballantine’s (and for our malternatives friends, perhaps Absolut vodka and Beefeater gin might ring a bell) fame, have in mind for TWE?

TWE certainly gives Pernod Ricard instant exposure and access to the fast growing e-commerce space; the spirits giant having previously only focused on owning and expanding a portfolio of brands, and the spirits producing facilities and distilleries behind them.

“E-commerce is a key channel in our long-term strategy. We are thrilled to work with industry pioneers such as Sukhinder, Rajbir and the whole team to bring The Whisky Exchange to a new step of its development.”

- Alexandre Ricard, Chairman and CEO of Pernod Ricard 

Alexandre Ricard, CEO of Pernod Ricard, has an ambitious plan to take the family business, the second-largest spirits company in the world, to the next level. (Image Source: The Drinks Business)

We’ll just have to wait and see. But let’s just say the whisky world is certainly getting spicier. 

The deal itself remains undisclosed in terms of the sum paid for TWE’s acquisition. It should be noted that TWE’s drinks agency Speciality Brands and blender/bottler Elixir Distillers will not be part of the deal, and will continue to remain in the hands of the Singh brothers, Sukhinder and Rajbir Singh, who founded TWE.

The Singh brothers grew up in a highly entrepreneurial setting; their parents having started the first Asian-ran liquor store in the UK. (Image Source: The Drinks Business)

The Singh brothers' success in the world of spirits started with their parents Narinder and Bhupinder Singh, who were the first Asians in the UK to be granted an alcohol license in 1971, which they then ran the the corner liquor store called The Nest, located in the west London town of Hanwell. 

“We both grew up in our parents’ business because we lived on top of the shop, so during the holidays and on weekends we would help out,” recalls Sukhinder.

A series of events, including the property slump the UK was facing at the time Sukhinder Singh, a chartered surveyor by training, graduated in 1990, led to the the Sukhinder helping expand the family business and eventually taking it online with his brother Rajbir. The rest, as they say, is history.

The Singh brothers are pioneers in having taken spirits online in the early days of the Internet. (Image Source: The Drinks Business)

TWE has certainly come a long way from its humble beginnings as corner liquor store in 1999, founded by the Singh brothers, to its massive influence in everything from on-trade supply to private sales and even its more recent move into auctions.

“After more than 20 years building The Whisky Exchange, we are delighted to be joining the Pernod Ricard family and working with them to take the business to the next level.

“The Whisky Exchange and our customers have always felt like a family, and we are looking forward to maintaining this ethos with a partner that shares our values."

- Sukhinder and Rajbir Singh, founders of TWE

(Image Source: The Street)

Well for now it seems like the acquisition was primarily executed for Pernod Ricard to access well-established e-commerce channels, but perhaps there’s more than meets the eye and only time will tell what this will hold for the future of TWE.

Kanpai!

@111hotpot