Distell taps into China's cognac market
Fin24/ I-Net Bridge - Oct 9th, 10:23
Johannesburg - South African liquor company Distell Group Limited [JSE:DST] has acquired a 60% share in fast-growing liquor distribution company CJ Wines & Spirits‚ expanding its presence in the East.
Privately owned CJ is based in Zhongshan in the Pearl Valley Delta of Guandong province and has operations in Hong Kong‚ Macau and Mainland China.
The purchase price was not disclosed.
The new venture‚ now trading as Distell China‚ is headed by MD Rody Wong‚ who previously ran CJ Wines & Spirits.
Wong‚ a former Apple and Seagram executive‚ who has worked in the US and Asia‚ has established a strong support base for the Bisquit cognac brand‚ which Distell bought in 2009.
Wong said Distell China’s focus would be on building the presence of Bisquit in the southern part of the country initially.
South China is referred to as the country’s “cognac belt” as this is where most cognac is consumed.
Exports of cognac to China are “surging”‚ according to French trade body Bureau National Interprofessionel du Cognac (BNIC).
The BNIC reported that for the 12 months to June 2012‚ year-on-year volume and value levels exceeded all past records‚ with producers shipping the equivalent of 168.5 million bottles of cognac‚ worth $2.8bn.
Demand in the Far East has outpaced other regions‚ where volumes rose 9.9% and value 21.4%. Asian countries imported 61.8 million bottles of cognac during the period‚ with China’s consumption‚ in particular‚ surging.
The Far East is now the world's biggest importer of cognac‚ with turnover exceeding $1.25bn.
“The partnership with Distell creates the opportunity to accelerate the excellent progress achieved thus far with two of the company’s major brands‚ Bisquit and Amarula. CJ’s conversance with the cognac market is an important asset‚ and we plan to bring this expertise in marketing to retail and on-consumption channels to Amarula‚ which is one of the fastest-growing spirits brands worldwide‚” Wong
According to Distell MD Jan Scannell‚ the plan is to capitalise on the strong market potential of South China and then address markets such as Beijing‚ Shanghai and Chengdu.
“The new venture will carry spirits and wines from around the world‚ and that obviously gives us the scope to explore avenues for some of our other brands.”
He said that the priority for Distell China was to focus on Bisquit and Amarula before considering other brands within the company’s portfolio for distributionFrom Fin24.com
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