Convivial circumstances

on 04 May, 2016

The purchase of Bibendum PLB by Conviviality, operators of Bargain Booze, Wine Rack and wholesaler Matthew Clark, is another development in the continuing consolidation of the UK wine trade.

 

The deal said to amount to £60 million seems to make sense on paper. The new company becomes vertically integrated incorporating the supply side with retail. But they can be uncomfortable bed fellows.

Matthew Clark is the UK's largest drinks wholesaler, supplying thousands of on licensed outlets throughout the UK. But because of its dominance there are many suppliers and retailers who do not want to deal with it.  They wish to offer something different, an alternative. Basically the same as restaurants and pubs not wanting to offer major brands that are available in the major multiples. How often do you see Jacob's Creek or Turning Leaf on a wine list? Hardy ever. No, never.

So you can see the logic of the deal but the wine sector is a fickle business.  It has been exploited by supermarket buyers and many sound businesses have gone to the wall, strangled by the squeeze on profit margins, leaving the major wine producers with big brands to deal direct with the multiple buyers who basically want the liquid and the major brands at the cheapest possible price..

One suspects that there will be some churning of suppliers and clients as the two businesses come together and realise the enormity of the deal and its implications.

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