Distell breaks contracts as it moves to direct distribution

By Jo Gilbert

Published: 20 October, 2016

South African alcohol producer Distell has unveiled plans to bring the distribution of all its brands in-house so that it can directly manage the sales and marketing of its UK portfolio.

As of January 9, 2017, the company is bringing the distribution of its Savanna cider, Amarula cream liqueur and portfolio of South African wines in-house to sit alongside its portfolio of Scotch Whiskies.

As a result, it will be exiting long-standing third party distribution relationships with SHS, Cellar Trends and Brand Phoenix.

The company said that significant investment had been put into its UK operations, which has been identified as a key region for growth within Europe.

This includes adding to its UK commercial team with further expansion expected next year.

The market service team has also been overhauled to oversee customer orders across the UK from its base in East Kilbride, Scotland.

"The decision to bring all our brands back under the Distell umbrella means that Savanna, Amarula and our wine and Scotch portfolios will be sold and marketed by our own team across the UK," Joseph Walsh, commercial director at Distell UK and Ireland said.

"This has been an extremely detailed and considered process and it reflects our confidence in the UK market and we look forward to strengthening our relationships in the UK trade as we look to drive value for the trade and consumers in the market."

This comes as the company reports muted growth in Q1 2016 compared to the same period in the previous financial year.

According to Reuters, in Africa, Distell achieved good revenue growth in Mozambique and Zimbabwe, although trading conditions are expected to remain unpredictable and volatile domestically and in traditional international export markets.

Overall, performance has been negatively impacted as the company continues to feel the effects of economic slowdown across Angola, which has historically been the company's biggest market in the region.

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