THE GLOBAL DISTRIBUTION  ARRANGEMENTS OF EDRINGTON Group, owner of The Famous Grouse, have been dealt a "fatal blow" by Pernod Ricard's £4.4 billion acquisition of Absolut, claim senior drinks industry insiders.

Pernod will almost certainly have caused irreparable damage to Maxxium Worldwide, Edrington's marketing and distribution joint venture, after confirming that it would be withdrawing the support of Swedish Absolut owner Vin & Sprit following the takeover.

With Pernod, owner of Chivas Regal, planning to pay a penalty fee of 20bn (£16bn) to withdraw Absolut from the global distribution arrangement by 2010 at the latest - some say it will happen next year - it looks like one setback too many for Maxxium, whose other partners include Paris-based Rémy Cointreau and Chicago-based Beam Global Spirits & Wine (a division of Fortune Brands).

Rémy Cointreau already announced in November 2006 that it plans to extricate itself from the global distribution alliance by March 2009. With Maxxium having been set up by the three founders in the belief that pooling their global sales, marketing and distribution operations would boost their chances of challenging the distribution might of drinks giants Diageo, Pernod Ricard and Bacardi, Remy is understood to have decided to leave after it became exasperated with difficult relations with other Maxxium member firms. This is linked to the fact that Maxxium is already weakened by only certain Beam Global brands being permitted to participate.

"I don't see how Maxxium can survive now," said an industry source. "The concept was probably flawed from the start. The danger for Edrington is that it is facing higher distribution costs and 12 to 18 months of disruption."

The source said Edrington is not likely to seek to revitalise Maxxium, for example by luring other independent spirits groups into the fold. The Glasgow group, which is unusual in that all its profits are donated to a charity, the Robertson Trust, also seems unlikely to want to struggle on with a watered-down version of Maxxium, in which its only partner would be Beam Global Spirits & Wine.

Instead Edrington, whose other brands include The Macallan, Highland Park and Cutty Sark, is more likely to cut its losses with the nine-year-old distribution company and instead seek alternative distribution arrangements.

Maxxium was set up in 1999 and brought onboard Vin & Sprit as its fourth partner in 2001. Internal fault-lines first became apparent in October 2005 when Beam Global was barred by other member firms from channelling brands it had acquired from Allied Domecq - Teacher's, Laphroaig and Courvoisier - into the distribution alliance.

Fearing conflicts of interest, Edrington Group and Remy Cointreau both exerted rights of veto to keep these brands out.

Last week, Ben van Doesburgh, chief executive of Maxxium, said: "Maxxium is proud to have supported the success of Vin & Sprit through the exceptional growth we delivered for seven years in a row. Maxxium is committed to building the portfolio of brands of Beam Global Spirits & Wines, the Edrington Group, Rémy Cointreau and V&S.

"Together with our shareholders, we will define the future beyond the eventual V&S exit to ensure Maxxium remains a superior builder of premium spirits and wine brands in the markets in which we operate."

Ian Curle, chief executive of Edrington Group, said: "We have been working hand-in-hand with the Maxxium management team and our shareholder partners to identify all the various options available to us to maximise our future distribution. That work is being carried out by a Maxxium cross-functional team and is going according to plan, and we are confident of achieving a smooth transition."

Maxxium, whose UK HQ is in Stirling, last year turned over 1.7bn, on which it made operating profits of 64m. The group distributes its portfolio of brands in some 60 countries and has a workforce of more than 2000 people.

According to industry sources it may now struggle to retain talent given the current uncertainty over its future.