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Richard Siddle comment April 8: Impact of Oddbins fall out on trust in the industry

Published:  08 April, 2011


One of the biggest consequences of Oddbins, oh, so public fall into administration this week is the large numbers of creditors, both very big and very small, that have been left high and dry by the collapse.

One of the biggest consequences of Oddbins, oh, so public fall into administration this week is the large numbers of creditors, both very big and very small, that have been left high and dry by the collapse.

The reasons for Oddbins failure are too complex to be given justice here, but the impact its collapse has had on the rest of the sector exposes a worrying and increasing trend.

One of the industry's biggest strengths is potentially its biggest weakness. This is after all a relatively small sector with lots of business deals based on relationships, trust and even friendships between the various parties.

This is a sector where a peer's handshake is as much a sign of trust as a pre-nuptials style agreement if things go wrong.

It is noticeable how many of the big losers in the Oddbins fallout also had their fingers, and toes, burnt in the demise of First Quench. But with few specialist players able to offer nationwide high street distribution to deal with, such financial mishaps are inevitable.

What this means for future business relations in the wine world will be interesting to see. But the issue of bad debts, late payments and withheld payments is pretty endemic when you consider the mixture of large companies, that can play hard ball over payment terms, and small businesses, merchants, restaurants and producers who rely on a regular and trusted cash flow to keep them going.

But what is to be done? Clearly looking after your own interests is paramount but hard to guarantee with current trading practices unless everyone goes down the route of being paid upfront or insists on credit insurance.

It is why producers and distributors are happier dealing with the financially stable grocery multiples

If the independent specialist on and off-trade sectors are to grow and succeed as so many in the sector hope, then determining how and when they are to pay their suppliers is as important as the quality of the wine they sell.

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