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State of uncertainty following the Conviviality and Bibendum deal still remains

Published:  06 June, 2016

A month on from Conviviality Retail acquiring Bibendum PLB, there still seems to be a state of uncertainty around what a deal of this magnitude could mean for the trade.

"The ramification of a consolidation of this scale, which the drinks industry has never seen before, I think could be quite seismic and that is not just limited to the direct turmoil this type of integration causes," said Andrew Bewes, managing director of Hallgarten Druitt.

Many across the trade still have questions as there will be winners and losers across the industry as the business integrate.

For example, with suppliers for the on-trade, the access to a much broader logistic network could be potentially a major benefit with access now to both Matthew Clark and Bibendum's accounts.

For customers there will be equal wins and losses. Customers could benefit enormously from a much improved distribution system with a much larger reach. Equally pricing could go down for many of the wine customers as the buying power of such a larger player drives down per unit costs.

Customers once benefited when Matthew Clark and Bibendum competed for accounts head to head helping to bring prices down as well which may no longer be the case.  Further, without this type of competition in the market place customers negotiating power may also decline.

There may be a reduced access to wines in the future depending on how much Conviviality decides to consolidate the range.  Patrick McGrath, managing director of Hatch Mansfield said:  "There will be some overlap. It will take at least a year to see how they are going to consolidate the range."

But it is still relatively unknown what impacts this deal will have on the future of the trade. "It is potentially a seismic change and I think it could be five or 10 years for it to come to real fruition and for us to understand what it means to the trade," said Bewes.

To see the impacts the acquisition of Bibendum PLB by Conviviality could have on suppliers, customers and competitors, please click here.