Allied Domecq Splitting With Cordiant

NEW YORK Spirits purveyor Allied Domecq, one of the largest remaining global clients of the long-troubled British holding company Cordiant Communications Group, has decided to pull its account, CCG said in a statement Monday.

Allied Domecq is assessing where to move the brands at CCG, according to a client representative, who said the company has begun conversations with global agencies that have above- and below-the-line capabilities.

The client notified CCG on Friday of its intention to terminate its contract with the beleaguered company effective October 2003. In the current financial year, CCG said it had budgeted revenue from the global contract of nearly $30 million, or some 3.4 percent of its revenue in 2002.

CCG shares plunged 63 percent to 84 cents following the news Monday.

Sources said Allied Domecq made the decision due to concerns about the financial stability of the holding company, which has had more than $600 million in account defections over the last 18 months, namely Hyundai and Wendy’s in the U.S. and most recently, Woolworth’s and Royal Mail in the U.K.

As a result of the impending loss, CCG said it is evaluating whether it can issue its preliminary year-end results by May 1. In accordance with the normal practice of the U.K. Listing Authority, trading in its shares will be suspended in the event that it is unable to issue its results by then.

The CCG board also acknowledged it is now “investigating alternative strategic options” for the holding company, in addition to the disposal program it previously announced. The holding company said earlier this year that it is looking to sell public relations firm Financial Dynamics International, its 77 percent stake in Scholz & Friends and a majority stake in its Australian operations.

CCG’s Bates handles general advertising for Ballentine’s, Tia Maria and Malibu, while its integrated marketing services unit 141 Worldwide oversees below-the-line duties on Kahlua, Beefeater, Malibu, Sauza, Ballantine’s, Stoli and Canadian Club.

Allied Domecq’s other primary roster shop for spirits, Publicis Groupe’s Publicis Worldwide, handles above-the-line for Kahlua, Canadian Club, Sauza, Stoli and Beefeater.