Distell sells Bisquit cognac brand to Campari
By Marc Hasenfuss - Dec 21st 2017, 10:09
Distell, the liquor brands conglomerate controlled by Remgro, called time on its international cognac market strategy by selling its French subsidiary Bisquit for à52.5m.
The cognac brand has been snapped up by acquisitive international liquor group Campari — which, aside from its eponymous aperitif brand, holds the Wild Turkey bourbon and Skyy vodka brands.
Campari CEO Bob Kunze-Concewitz reckoned there would be potential upside in further developing its new business internationally — especially in the US and China.
Under the terms of the sale agreement, Campari will acquire all the shares in Bisquit as well as existing stock, maturing inventory, trademarks and production facilities.
The classic range of cognacs includes Bisquit VS Classique, Bisquit VSOP, Bisquit Prestige and Bisquit XO. The deal might surprise Distell shareholders in light of the company’s determined push to increase its international earnings base.
Distell — which is one of the largest brandy producers in the world — only bought Bisquit in early 2009 from drinks giant Pernod-Ricard for à31m.
At the time, Distell — then headed by Jan Scannel — believed Bisquit would fortify its spirits portfolio with a highly respected international brand.
Distell CEO Richard Rushton said the sale of Bisquit would allow the company to focus on building its core brands — especially in Africa.
“The sale will ensure the assets within our portfolio align with our strategy and generate long-term shareholder value,” Rushton said.
Distell’s growth strategy for Bisquit had largely been premised on breaking strongly into the Chinese and other key markets, he said
“This did not happen, and at the moment we probably are not the best owners for the Bisquit brand. We would prefer to accelerate our growth in other liquor categories,” he said.
Distell owns strong-selling brands such as Savanna, Hunters Dry, Fourth Street, Durbanville Hills, Klipdrift, Nederburg, Four Ships, Amarula, Fleur du Cap, and Richelieu.
Much of Distell’s growth in recent years has been driven by its successful niche in the cider market via Savanna and Hunters Dry as well as in the affordable wine market via Fourth Street.
Some market watchers questioned the decision to relinquish a brand such as Bisquit, which has international renown and might become even more valuable in the longer term.
However, Opportune Investments CEO Chris Logan felt Bisquit did not fit in with Distell’s route to market capability — which focused on Africa and high-volume products rather than the luxury brand niche.
Distell has also recently indicated that a number of its wine brands could be culled in a bid to refocus on best-selling brands.© BusinessLIVE MMXVII
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