Distell strengthens Dutch distribution ties
2007-03-08
HAVING shown considerable resilience in the face of the continuing global wine glut, Distell is further strengthening its international distribution ties to grow its brands in more major markets.
Shortly after concluding an agreement to become the sole supplier of South African wines to Nordic distributor Altia Corporation, that also serves the Baltic markets, Distell has entered into a deal with Baarsma Wine Group Holding to carry some of its leading brands in Holland.
The Netherlands is South Africa’s largest wine export market after the UK.
Baarsma Wine Group Holding (BWGH) is a leading player in the Dutch retail and on-consumption channels representing a range of established trademarks to over 6 000 trade customers.
The organisation also sells direct to a consumer base of over 30 000.
Its portfolio includes a broad range of private label wines and it also supplies buyers’-own-brands to many of the country’s major supermarket chains.
In addition, the group, which is projecting a turnover of €175m for the current financial year, runs a highly sophisticated bottling plant with an annual capacity of 45 million bottles.
Commenting on the deal that will see BWGH carry drive brands such as Fleur du Cap, Durbanville Hills, JC le Roux, Pongracz, Two Oceans and Drostdy-Hof, Distell’s director: international, Don Gallow said: “Historically Distell has given less weight to this market than many other South African producers, because it is characterised by heavy discounting, whereas our policy is to protect brand equity.
“However, BWGH gives us access to a combination of supermarket and specialist retail and on-consumption channels for some of our most important wine trademarks. The agreement gives us a balanced exposure across a range of channels and price points.
“Moreover, with Wine Excel, a member of BWGH, we can explore the option of bottling some of our buyers’-own-brands in Holland, where this is deemed appropriate.”
BWGH was recently identified as a young, dynamic and fast-growing company by ABN Amro Capital, which acquired a major share of the Dutch distributor, now active in 28 markets across the world.
Meanwhile, Distell is also strengthening its ties with national US distributor AV Imports that is rapidly building the profile of its brand Two Oceans.
Gallow says Two Oceans is also doing exceptionally well in Canada, where it is the top-selling South African brand, with the Sauvignon Blanc, in particular leading sales. It is listed by both the Liquor Control of Ontario (LCBO) and Société des Alcools du Québec (SAQ).
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