Miller to Launch Vodka Malt Drink

NEW YORK -- Miller Brewing Co. and Skyy Spirits of San Francisco, the maker of SKYY Vodka, yesterday said they plan to introduce a malt beverage containing SKYY Vodka, jumping into the fast-growing U.S. market of alternative malt drinks currently led by Smirnoff Ice.

The drink, to be called SKYY Blue, will face tough competition in the "malternative" beverage category. Malternatives are chipping away at the U.S. premium light beer segment, which includes Miller's own Miller Lite.

Malternatives are currently led by Smirnoff Ice, a drink from Diageo Plc. While Smirnoff Ice bears the Smirnoff name, the version sold in the United States contains no vodka, according to Reuters.

Milwaukee-based Miller Brewing is a unit of Philip Morris Cos. Inc. and is the number-two U.S. brewer behind Anheuser-Busch Cos. Inc. Anheuser-Busch also has plans to enter the malternative category in the coming months with Bacardi Silver, a flavored drink from it and spirits giant Bacardi USA. The world's top brewer has yet to confirm if the drink it plans to introduce will contain spirits, namely Bacardi rum, the report said.

Guinness UDV, the Diageo unit that makes Smirnoff Ice, said late last year that its drink has captured 1 percent of the U.S. beer market since its late January 2001 national launch. SKYY Blue is scheduled to arrive in retail stores in early March, the companies said.