Wyborowa cuts jobs as cheap vodka demand soars

Polish vodka producer Wyborowa is expected to cut jobs and salaries next month following a shift in consumer demand towards low-priced vodka. The company's share of the Polish vodka market has dropped following a lack of investment in the Wyborowa brand and increased demand for cheaper vodka brands. Polish press reports claim that Wyborowa has agreed to cut an undisclosed number of jobs and reduce the salaries of remaining staff by seven per cent.

The original deal to cut jobs allegedly came last September when the distiller struck a deal with employees to cut 99 jobs at its Poznan distillery. According to the Polish Alliance of Trade Unions, Wyborowa's employees have not agreed to the pay cut, but the company was unavailable for comment. The value of the Polish vodka market has grown five per cent since 2003 to PLN116billion (30bn), while the volume consumed has grown by seven per cent to 2.5billion litres. Although premium vodka consumption is said to be falling a recent Eurmonitor report on alcohol consumption revealed that despite changing consumption habits Poles will continue to drink vodka. The report argued Vodka is deeply embedded in Polish culture and this is not likely to change greatly.

EU entry will bring a sea of change to the current structure of the domestic vodka market, currently pigeonholed into four broad categories: economy vodkas? popular midprice? local premium? and imported premium, the report added. The report claims that the imported vodka category, now dominated by two EU producers, will disappear, together with customs duties, and be absorbed into the premium category. At the other end, economy products may be forced out of the market, strengthening the popular midprice.

If this is true Wyborowa, as a premium vodka producer, must rethink it tactics to penetrate the drinks market. Figures from the World Health Orgnisation show that overall consumption of spirits has continued to fall over recent years and the jobs cuts in Poland would indicate that this trend is continuing. Wyborowa is owned by the world's second largest spirits group Pernod Ricard, which recently acquired Allied Domecq.