GRANDMET REVIEW CONTINUES DESPITE MERGER PROPOSAL: COMBINATION WITH GUINNESS WOULD CREATE A $90 MIL POWER IN PRINT BUYING

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Even as its British parent was announcing a merger that would create the world's largest spirits company, International Distillers & Vintners was listening to pitches for its consolidated $50 million print media-buying account.

International Distillers is going forward with the review for its parent, Grand Metropolitan, which is merging with Guinness in a $22.3 billion deal.

The review, which will band together print buying for sister GrandMet units International Distillers and Pillsbury Co., is continuing without McCann-Erickson Worldwide, New York, which had acted as print negotiator for International Distillers.

According to executives familiar with the review, McCann dropped out because its client Nestle USA objected to the agency working with rival Pillsbury.

Y&R, JWT, LOWE, WESTERN VIE

The McCann dropout leaves Y&R Advertising, J. Walter Thompson USA, Lowe & Partners/SMS and Western International Media, all New York, in the review.

International Distillers is carrying on with its search even though the combined organization of GrandMet and Guinness, to be called GMG Brands, may well re-evaluate media buying and ad agency assignments if and when the merger is approved.

GMG would pack substantial clout as a media buyer. The combined entity would be a print advertising heavyweight, particularly in the magazine segment.

GrandMet last year spent $54.5 million on magazine, Sunday magazine and newspaper advertising, while Guinness spent $32.6 million, according Competitive Media Reporting.

The two were strongest in magazines, with GrandMet ranked 29th in spending at $49.8 million and Guinness ranked 56th at $31.2 million, according to CMR. Their combined spending would have placed them at the 13th spot, edging out Walt Disney Co.

LIQUOR DRIVES SPENDING

The liquor category drove the magazine spending totals at the two companies, largely because until last year spirits marketers didn't advertise on TV in the U.S.

GrandMet's International Distillers unit spent $34.7 million on magazine advertising for liquor, and $39.1 million overall, according to CMR. Guinness' United Distillers spent $29.1 million on magazines and $35.2 million overall.

Media watchers have speculated that the Guinness/GrandMet combination might ultimately prove a boon for Leo Burnett USA, Chicago, which does media buying for United Distillers as well as creative work for its Dewar's and Johnnie Walker scotch brands.

Although Burnett works for McDonald's Corp., a competitor of GrandMet's Burger King Corp., it could wind up doing more buying for the combined British giant because McDonald's and BK do little print advertising.

Vernon, Sassos, McGill, New York, handles media buying for the beers handled by Guinness Import Co.

WINNOWING ROSTER?

In any event, observers predicted GMG also would do some consolidation among the more than a dozen agencies that handle creative and promotion work for International Distillers, United Distillers and Guinness.

If the spirits company were to overconsolidate the creative side, it might lose touch with the work that has gone into developing brand images for products like Stolichnaya, marketed by International Distillers with advertising by Margeotes/Fertitta & Partners, or Tanqueray, marketed by United Distillers with advertising by Deutsch.

"People don't buy holding companies; they buy brands," said one ad executive.

Contributing: Chuck Ross, Judann Pollack, Scott Donaton.

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