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Trade reactions to Conviviality collapse

Published:  29 March, 2018

In light of Conviviality’s fall from grace, following a tumultuous month which saw three profit warnings, its market value tumble, shares suspended and the departure of CEO Diana Hunter, Harpers has gathered opinions from across the drinks industry as the business prepares to file for administration

Andrew Shaw, group wine buying director, Conviviality Plc

Clearly the future is uncertain, but what I have been totally overwhelmed by is the level of support from our supply base. This only reminds us what a close-knit community we are within the drinks and wine trade.

In the midst of this short-term challenge, it reflects the level of affection and support that our suppliers have for us. This is a relationship business, built on respect, loyalty and of course a successful trading environment, which Conviviality has provided and they have benefitted from throughout.

We have an unwaivering belief in the opportunities ahead and our collective talent that forms the foundation of our business. We have a strong team and we believe in what we do.

Andrew Bewes, managing director, Hallgarten & Novum Wines

A sad day; it would be inappropriate for me to comment on the specifics behind Conviviality’s statement this morning, but clearly this is a challenging time for their employees, customers and suppliers. It’s all too easy to ignore the human cost of business failure, particularly one of this scale.

On the trade side of the Conviviality business, the core strengths and experience of both Matthew Clark and Bibendum will no doubt quickly bring potential investors to the table. We very much hope the directors of Conviviality, and their advisors, find a positive way forward and wish them the best of luck.

In the meantime we are dealing with the reality of the situation - a large number of deeply concerned on-trade customers, both large and small, desperately seeking potential supply of key wines to keep their businesses running over the next few days and weeks. A challenging time for us all.

Liam Steevenson MW‏, owner and consultant, Global Wine Solutions

The implications for the UK wine trade of this week are huge. Blame has to fall on the management. The whole industry needs to rethink reasonable margins and credit control. Producers should demand complete transparency going forward.

Hal Wilson, managing director, Cambridge Wine Merchants

Like many I am conflicted by the news. I had imagined that Conviviality would find the necessary finance and the fact that it couldn’t does not bode well for our industry. It’s a dark time for the UK wine trade’s relations with the world’s drinks producers. I feel particular sympathy for the many thousands of staff who will head into the Easter break with anxiety about their futures.

Like many independents we are both customers and competitors of various parts of the Conviviality group. As competitors we have come up against Matthew Clark and its aggressive pricing and questionable practices. I hope whoever buys Matthew Clark will endeavour to trade profitably, for all our sakes. As a customer we experienced issues with ordering ex cellar last year and I fear that again there will be a period of uncertainty ahead as producers decide what their best course of action is.

In short it’s a mess of the management’s making, that tarnishes the reputation of the trade as a whole, and sadly we’ve been here before with First Quench, Oddbins, Waverley…

Martin Williams, CEO & founder, M Restaurants

There is no question that Matthew Clark, and in turn Conviviality, has been an outstanding partner to M and many others in the industry over the past three years. I suspect that its excellent quality of both offering and support will make the business a very attractive asset to the right buyer, in the next stage of its journey.

Tim Atkin MW, writer and wine judge

I’m saddened and I feel very sorry for a lot of good people and I really hope it works out.

David Gleave MW, managing director, Liberty Wines

It is a very sad turn of events. Hopefully, as many of the 2,600 employees as possible will find alternative jobs in the industry, or in any new entity that emerges from the ashes of Conviviality.

It is also sad that so many wine producers will lose money. At a time when they are struggling with problems of low quantity from the 2017 vintage, losses such as they will incur from Conviviality may tip some of them into bankruptcy.

Joe Fattorini, wine presenter & writer

I’ve been involved in different parts of the business for over 20 years so it’s tough watching what’s happened to the group. But I’m so proud of the mood among my colleagues and friends from both Matthew Clark and Bibendum. These guys are lions. They’re determined to get stuck in and carry on and come out on the other side. It is a really difficult situation. But it’s important to remember what made the business so successful for so many years. It’s the folk within it. And they are determined to soldier on and not let their customers down.

Nik Darlington, managing director, Red Squirrel Wine

If Conviviality cannot avoid what now looks likely - careering into administration - then it’s a spectacular fall from grace and cataclysmic for the wine trade at home and abroad, as well as our wider hospitality industry.

Thousands of jobs are at risk, and that’s only what we can account for among the wider Conviviality workforce itself. Umpteen winemakers and suppliers around the world shall presumably be out of pocket. Many great producers could lose an important route to market, some may already be considering their options.

I am aware some people are already converging on Conviviality’s customer base before the doctor has even had a chance to announce time of death. Maybe that’s just doing business, and fair enough to some extent. Other suppliers do need to step into the breach and help restaurants or shops in need of stock if trading is halted, but perhaps without such an ambulance-chasing mentality.

Fundamentally if it all comes crashing down then it is a tragic case of mismanagement and the UK trade needs to get behind the staff, restaurants, shops, winemakers and so on who are going to suffer most. They will need our support, and we should all aim to do our bit.

Alex Hunt MW, purchasing director, Berkmann Wine Cellars

This is not the outcome we were hoping for. The risk to so many jobs, and the disruption to both suppliers and customers, is manifestly detrimental to our industry and to the hard-working individuals who sustain it. We hope that a solution will emerge in the coming days and weeks that allows as much as possible of Conviviality’s invaluable supply chain to remain intact.

That said, it is clear that something in our industry has to change. If a business of this scale and clout cannot operate sustainably and profitably, then the model must be wrong. When margins are so thin, investment is curtailed, innovation stifled, and customer experience sacrificed on the altar of lowest cost.

In contrast, we have consistently found that focusing on quality, service and added value delivers not only profit throughout the supply chain but an enhanced experience for the end consumer. The British consumer may be notoriously price-sensitive, but they are sensitive to other factors too. The balance needs redressing, and despite all the disruption caused, events at Conviviality may prove to be just the wake-up call our industry needs.

Miles Beale, chief executive, Wine and Spirit Trade Association

It is sad news for all concerned and for the wine and spirit industry as a whole that Conviviality has announced plans to file for administration.

We are sending our support and best wishes to Conviviality’s employees who are facing uncertain times. The WSTA look to support the great British wine and spirit industry – including its jobs, businesses and employees facing uncertain times.