History
The roots of Altia Plc can be traced back to 1888 when a yeast plant was established in Rajamäki, Finland by a group of Finnish engineers. Rajamäki was selected due to a new railway connection between Hyvinkää and Hanko which passed by Rajamäki and thus made the transportations of raw materials and products effective; large amounts of fresh ground water were also available around the area.
The plant manufactured compressed yeast and, in the same process, spirits, ether and vinegar. After Finland’s independence a Prohibition Act was issued in 1919 and the state of Finland acquired the ownership of the plant. A public utility, named Valtion Alkoholiliike, was established to produce alcohol for medicinal, technical and scientific purposes during the Finnish Prohibition Act 1919-1932.
In 1932, when the Prohibition Act was abolished, a state-owned monopoly company Oy Alkoholiliike Ab was established to give citizens access to legalized alcohol beverages and to run down the flourishing smuggling business. Oy Alkoholiliike Ab run a monopoly for producing and trading alcohol beverages in Finland until 1968 when beer and mild alcohol beverages were allowed to enter grocery stores.
Koskenkorva enters the market after the war years
The need to build new distilleries in Finland had already emerged before the Second World War. The construction of the Koskenkorva distillery in an area of potato overproduction in Southern Ostrobothnia had began in 1938 and Oy Alkoholiliike Ab’s new headquarters and plant in Salmisaari, Helsinki were completed two years later, in 1940. Post-war rationing also affected the trade of alcoholic beverage but the entry of Koskenkorva Viina to the market in 1953 was a sign of better times to come, whereas the launch of Finlandia Vodka in 1970 started the export of alcoholic beverages on a broader scale.
During 1969-1995, the company operated under the name Oy Alko AB, enjoying the monopoly rights for production and trade of wine and strong spirits in Finland.[3] In 1995, after Finland had joined the European Economic Area (EEA), the monopolies relating to foreign trade as well as the production and wholesale monopoly of alcohol were dismantled and discussion of the future of the alcohol beverage business started. Alko Ltd was divided into independent subsidiaries and the parent company was named Alko Group Ltd. It consisted of three subsidiaries; Industry and production focused Primalco Inc, special store chain Alko Inc – responsible for the retail shops - and Arctia Inc, responsible for restaurant business. In 1997 Alko Group Ltd established an additional subsidiary for distribution and wholesale of alcohol brands in the Baltic Sea area: Havistra Inc.
Altia is established in 1999 and further acquisitions pave the way
In 1999, after a heated political debate, the final division between retail and production business was carried out and the retail shop chain Alko Inc was transferred under the rule of Ministry of Social Affairs and Health, regaining its monopoly status. Meanwhile new Altia Group, under the rule of Ministry of Trade and Industry, was established. In 2000 Altia Group revised its strategy and sold the premium brand Finlandia Vodka in a phased process to an US company Brown-Forman, with a precondition that Brown-Forman would continue to buy production services of Finlandia Vodka from Altia until 2017, a contract which has later on been extended to 2025. The selling of Finlandia Vodka brand changed the business focus at Altia – where as Finlandia Vodka had earlier been in the centre of Altia’s strategic plans, Altia now aimed to become a full service alcohol beverage house and a leading player in the Nordic and Baltic area. In 2002, the remaining subsidiaries of Altia Group were merged with the parent company and the name was changed to Altia.
Targeting to achieve an established position in the Nordic alcohol beverage business, Altia Plc acquired Scandinavian Beverage Group in 2004 – a Nordic group consisting of subsidiaries selling and exporting alcoholic beverages. The acquisition made the company a significant alcohol beverage operator in the Nordic country area, almost doubled net sales and 1.5-folded Altia’s logistics operations in the area. Altia had been active in Estonia for some time already and it strengthened its position in the Baltic market furthermore in 2006 by acquiring SIA Mobil Plus ADV, the second largest operator in the Latvian alcoholic beverage industry. At the same time, the group went through comprehensive changes in organization structure and operating model. Altia’s growth strategy was further defined in 2009; the plan was set to grow company value in three waves.
Growth through brand acquisitions
Due to the saturated state of Altia’s home markets, brand acquisitions were seen as a key to growth in the Nordic and Baltic area. Altia Plc acquired the leading Swedish cognac brand, Grönstedts, in 2009. In 2010 Altia acquired a portfolio of wine brands including Chill Out and Blossa Glögg and a portfolio of Swedish and Danish heritage spirits together with a production premises in Svendborg (DK) and logistic centres in Odense (DK) and in Stockholm (SE). The acquisition expanded the company’s operations and business portfolio on to a new level and built a strong position in Sweden and Denmark. Groups operational efficiency was under special focus in 2010 and 2011 and in addition to the plant specialization, several actions were implemented in order to improve cost efficiency of distillation, alcohol beverage production, logistics and sourcing activities.
In the end of 2010, Altia acquired Cognac Renault brand, making the company a significant player in the cognac business. 2012 saw new brand acquisitions in form of a Latvian vodka portfolio including Arsenitch, Altia’s first Russian originating vodka and Xanté cognac liqueur. Meanwhile, Altia’s operations were further streamlined to support growth activities and to utilize economies of scale. In 2013, Altia became at that time the 6th largest cognac operator in the world by acquiring Larsen Cognac brand together with substantial aging inventories and production facilities in Cognac region (FR) from Remý Cointreau Group. After the acquisition, Altia had 17% market share of the cognac market in its operating area as well as distribution channels for Larsen in Asia, Americas and Europe. In 2013, Altia also acquired Brøndums acquavit in Denmark.