Trade reacts to Conviviality deal with Bibendum PLB

Conviviality’s acquisition of wine-led distributor Bibendum PLB has triggered a mixed reaction from leading rival companies.

Diana Hunter, Conviviality CEO (Photo: Conviviality)

“Every time this [consolidation happens] it makes us stand out providing us with a unique selling point (USP) of being an independent company,” said Alex Hunt MW purchasing director at wine distributor, Berkmann Cellars. Hunt said he was happy with the acquisition: “Whereas before, we would compete directly with Bibendum PLB, there is now a new space to fill, [against a homogenous group]” he said.

Although Conviviality has said its component companies including Bibendum PLB and Matthew Clark (MC) will operate independently as separate brands, several companies consulted said the acquisition would inevitably lead to crossover business between brands and cost-cutting measures.

Andrew Bewes, Managing Director of wine distributor Hallgarten Druitt & Novum Wines (HDN Wines) said that while the acquisition may provide a USP for independent companies on a national level, the chief industry concern was over Conviviality’s market share as the UK’s largest drinks wholesaler and owner of several companies including Bargain Booze, MC and Bibendum PLB, now seen by some industry players as the behemoth of the drinks industry.

“It’s a big group; this is something we have not seen before in the wine trade,” Bewes said.

“The acquisition means that in wholesale Bibendum PLB and Matthew Clark together will now generate 50% more annual turnover than the combined turnover of competing top seven national wine-led distributors in the market,” he said.

“Choice has now been reduced,” Bewes said. “It is worrying.”

With the acquisition of Bibendum PLB, Convivality’s annual turnover will reach £1.4 billion, with about £1bn generated from wholesale and the rest from retail sales.

Industry concern over the acquisition was however played down by a senior source at Enotria & Co, who praised the acquisition.

He said: “Diana [Hunter] is reshaping the market, in an aggressive way. Both Bibendum-PLB and Convivality are good companies and if the acquisition leads to people buying more drinks then that’s great,” he said.

Enotria & Co and Boutinot generate the highest turnover in wine-led wholesale after Bibendum-PLB and fellow significant national players include HDN Wines, Liberty Wines, Classic Drinks Ltd and Alliance. Directors at Boutinot were unavailable for comment and Classic Drinks Ltd declined to comment on the acquisition. Conviviality shareholders are expected to approve the acquisition of Bibendum PLB at a general meeting on 19 May.

Several industry players including Miles Beale, chief executive of the WSTA, Britain’s Wine & Spirit Association, said the acquisition had come as a surprise and was a sign that the lines between the on- and off-trade were being being further blurred in the UK.

The acquisition was announced on 2 May on the eve of the London Wine Fair, where a source at Enotria & Co was nonplussed and unruffled by the development.

“The UK drinks business is a dynamic market and this is the latest takeover in a consolidation process which has been going on for some time,” he said.