Two of the UK's largest wine merchants have merged their businesses after restaurant supplier Bibendum agreed to acquire retailer-focused supplier PLB, amid tough trading conditions in the country.
Bibendum holds a controlling stake in the merged business, which has been named Bibendum PLB Group, a spokesperson for the firm told Decanter.com. The size of the stake held by PLB‘s owner, the Fredericks family, was not disclosed.
The move creates a wine merchant worth around £300m in annual sales and with a broad reach across restaurants, supermarkets and independent retailers.
A fall in overall wine consumption, repeated duty tax hikes and strong price competition between the big multiple retailers have put pressure on the UK wine trade’s profits in recent years.
‘Consolidation has been a widely discussed topic in the industry for several years as companies strive to grow in a low margin and complex market,’ said Bibendum’s chief executive, Michael Saunders. ‘Our new group will be uniquely placed to offer customers the best possible service.’
When asked whether either company was under acute financial stress, a Bibendum spokesperson said, ‘Neither company was struggling, they just both saw the potential for growth by joining forces’.
PLB does the majority of its business with multiple retailers, several of which have faced financial pressure in 2014. Last week, Tesco reported a 92% drop in net profits for the first half of its fiscal year.
PLB’s latest accounts, for the year to the end of August 2013, showed net sales fell by 11% for the 12 months, to £125m. But, net profits rose by 5% versus the previous year, to £345,000, according to records at Companies House.
PLB’s founder and chairman, Jeffrey Fredericks, said the newly merged group will be able to reach all parts of the UK wine market. ‘As a family business, it was very important to us that we found the right partner and we have found that with Bibendum.’
Written by Chris Mercer