Competition Bureau Requires Divestitures to Address Competition Concerns in Diageo plc Acquisition of Seagram Spirits and Wine Business

OTTAWA, October 23, 2001 — The Competition Bureau announced today that it has reached a settlement with Diageo plc to resolve competition concerns arising from the proposed acquisition of the Spirits and Wine Business of The Seagram Company Limited by Diageo plc and Pernod Ricard S.A. To address the Bureau's concerns, Diageo has agreed to divest the Gibson's Finest brand of Canadian whisky and related assets.

"The divestiture of this brand ensures that the market for premium Canadian whisky will remain competitive," said Gaston Jorré, Senior Deputy Commissioner of Competition, Mergers Branch. "As a result, consumers will continue to enjoy the benefits of broad product selection and competitive prices."

On December 20, 2000, Diageo and Pernod Ricard announced their successful joint bid for the Spirits and Wine Business of Seagram which Vivendi S.A. was offering for sale. In a worldwide transaction valued at U.S. $8.15 billion, Diageo and Pernod Ricard would each acquire certain businesses from Seagram and would dispose of other businesses following approval by antitrust agencies including those in the U.S., Europe and Canada. Review of this transaction included extensive cooperation between the Competition Bureau and the U.S. Federal Trade Commission.

Following a thorough review, the Bureau concluded that the Diageo purchase of Seagram's Canadian whisky brands, which include Crown Royal and Seagram's VO, would likely result in a substantial lessening of competition in the supply of premium Canadian whisky products in provincial markets.

Under the terms of the Undertaking provided to the Bureau, Diageo must sell the Gibson's Finest brand within a set period of time. If the terms of the Undertaking are breached or if the brand is unsold at the end of that period, the Bureau will file a Consent Order with the Competition Tribunal which, if approved, would place the sale in the hands of a trustee.

The Bureau determined that the Pernod Ricard portion of the proposed transaction would not give rise to concerns under the merger provisions of the Competition Act.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

For more information, please contact:

Tim Weil
Senior Communications Advisor
Competition Bureau
Tel: 819-953-9271 or 613-296-2189 (cell.)

General Public Enquiries, please contact:

Competition Bureau's Information Center
819-997-4282 or toll-free 1-800-348-5358