De Bortoli Wines closes UK office

By Gemma McKenna

Published: 10 September, 2014

Australian wine estate De Bortoli Wines has closed its standalone UK distribution office - instead opting for an equity stake in newly-founded North South Wines distribution firm.

Mark Wilson, De Bortoli UK's general manager, said the business model had become unsustainable. "We were one of the last few remaining sole suppliers with its own UK office - it's quite a considerable investment.

"De Bortoli want to continue investing in the UK, but running the office is quite a hefty overhead to carry, and there have been a few hard knocks in the past couple of years - such as the exchange rate - which have made it impossible to be profitable."

Wilson added that De Bortoli has been rationalising its export business globally, with the US also facing "significant changes".

De Bortoli had been facing the prospect of notable price hikes in the face of worsening profitability. Wilson said the move also offered a chance to get further distribution and volume into the market, saying the group had problems accessing independents, especially those who were looking to rationalise their supply base.

"The economics makes sense, but emotionally it's a huge wrench," Wilson said. Closing the UK office had "been a very tough decision", according to Wilson, especially after the De Bortoli family had operated in the UK in this guise for the past 15 years.

"In 2008 and 2009 it was at its peak- but then the 40% devaluation of the Australian dollar to the pound happened and it was very tough." He added that the "consolidation within the UK market had also diminished some of the opportunities."

"It's been a while coming - but you can't continue to bury your head in the sand," he said of the office closure.

Orders will transfer over to North South Wines from the end of this month, and the company foresees it will continue to trade until November, in order to manage administration such as debt collection. North South Wines was founded by two former Ehrmanns directors, Joy Edmondson and Kim Wilson, alongside ex-Nyetimber and Liberty Wines' head of finance Hamish Gillespie.

De Bortoli employs six staff from its UK office, and discussions will be taking place over the next few weeks as to whether they can be found positions within North South Wines.

Wilson said he personally won't be part of the North South Wines team, but would be involved in the handover for a period of time.

Prior to making the investment in North South Wines, De Bortoli had been considering alternatives in the UK, including taking on other agencies itself or joining forces with other like-minded suppliers.

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