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Berry Bros. & Rudd enters redundancy consultation with staff

Berry Bros. & Rudd, the UK’s oldest fine wine merchant, has “entered into a consultation process with colleagues across 30 roles”, around 7.5% of its workforce, due to tough market conditions, db can exclusively reveal.

Berry Bros. & Rudd enters redundancy consultation with staff

CEO Emma Fox said in a statement shared with the drinks business that Berry Bros. & Rudd has entered into redundancy consultation with 30 of its employees.

Fox, who was appointed as CEO in August 2020, cited “extremely challenging global market conditions” as a factor in the company’s decision.

She also cited the recent increases in national insurance (NI) contributions, introduced by Chancellor Rachel Reeves in the 2024 Autumn Budget. The NI rate will increase for employers from 13.8% to 15% in April 2025. The threshold at which employers start paying NI will also decrease from £9,100 to £5,000.

Fox’s complete statement read: “Like many businesses, we are having to make some very difficult but necessary decisions in the face of extremely challenging global market conditions, as well as significant cost pressures, high inflation and recent increases in NI contributions.

“As such, we have recently entered into a consultation process with colleagues across 30 roles. We are doing everything we can to support all of our dedicated colleagues and especially those affected by this announcement.”

The company currently employs around 400 staff members globally. Berry Bros. & Rudd told db that the consultation will affect roles across all departments. This is the first major restructure by the company since 2016, when Berry Bros. & Rudd shook up its business in Asia and the UK, a move which resulted in £2.1 million in costs related to redundancies and office closures.

The impact of global economic headwinds was reflected in Berry Bros. & Rudd’s results for FY24.

Financial results

Group turnover, excluding adjustments for en primeur wines, for the 12 months to 31 March 2024 fell by 3.3% to £245.98 million, according to the documents filed at Companies House in December.

At the time, Fox attributed the decrease mainly to “a sales decline in our American spirits import business, Hotaling”.

Berry Bros. & Rudd also recorded a loss before tax and exceptional items of £1.2m, down from a profit of £9.46m the previous year.

Fox stated that it had been a “turbulent year” for global fine wine and spirits markets and the luxury consumer goods sector.

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The company suffered year-on-year decline in EBITDA of 51.5%. The CEO blamed “global uncertainty and challenging macro-economic headwinds, coupled with a year of planned high investment for BBR”, noting that the drop had been “anticipated” by the group.

Challenges in the US were predominantly to blame for the fall in revenues, which weighed on its US import business.

It was a different story for Berry Bros. & Rudd’s fine wine and spirits business, which operates predominantly in the UK and Asia. This arm of the business performed well with a low-digit increase in revenues year-on-year. Here, the company reported an increase in customer numbers, particularly among collectors, and increased frequency of purchase across the year. Its BBR brands and UK distribution channels grew 11.8%.

Growth plans

Fox said the company had “adapted to the new realities of the market”, citing lower revenues and squeezed fine wine margins.

Chair Lizzy Rudd also made a statement as part of Berry Bros. & Rudd’s results filed on Companies House. Rudd warned that the market challenges which impacted its FY24 results were likely “to persist over the next 12 months, in an industry that has not seen stability in some time”.

Despite the difficult trading outlook, the company is continuing with its growth strategy. The group has invested more than £27m in new business ventures and technology infrastructure.

Fox noted that “continued investment in our long-term growth” also resulted in “a lower operating margin”.

However, she said: “as a 326-year-old family business, we plan for horizons of growth that span generations, not just financial quarters.”

She continued: “Our business thinks and plans in generational timescales and therefore we have not let the market conditions deter us from investing in our future growth and capabilities, where we have seen opportunities to diversify and grow.”

Berry Bros. & Rudd’s family of businesses expanded last financial year with acquisition of minority stake in the Cotswolds Distillery and joint acquisition of Hambledon Vineyard with long-term partner Symington Family Estates, investments which “diversify our income streams”, Fox said.

Responding to questioning by db over whether redundancy consultations would impact plans for growth, a representative of the company said: “Like many businesses, we are having to make some very difficult but necessary decisions in the face of extremely challenging global market conditions, to enable us to achieve our plans.”

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One response to “Berry Bros. & Rudd enters redundancy consultation with staff”

  1. Malcolm Coury says:

    BBR is a great company with fantastic products and an old fashioned emphasis on customer service. I’m sure they’ll bounce back.

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