E-Malt.com News article: 1837

Scottish & Newcastle announced that it is finalising plans to merge the Beer Seller wholesale business with its Waverley wine distribution arm, according to The Puplican report from November 24. An S&N spokesman said: "We are looking seriously into this, and there could be a formal announcement in January." The combination will create a £450 million operation which will see S&N overtake rival Matthew Clark as the on-trade’s biggest wholesaler. Scottish Courage managing director John Dunsmore said a merger would generate cost savings, but stressed: “The big prize is creating the leading wholesaler with a wine and beer specialisation.”

The Beer Seller was a ‘bonus’ acquired by S&N as part of its takeover of cider maker Bulmers earlier this year. S&N had expected to have to sell the distribution business to satisfy competition concerns. When the sale was waved through with no conditions attached, S&N backtracked on plans for a management buy-out, which Beer Seller boss Jean Francois Jamet had been negotiating with Bulmers.

There had been speculation that S&N might sell the Beer Seller to a management buyout led by its managing director Jeff Jamet, for about £30 million, following the £278 million acquisition of Bulmers last spring, The Scotsman said on November 25. But it seems S&N has had a change of heart, and believes it would be better to keep the Beer Seller in-house as part of an enlarged drinks wholesaling business that could mount a stronger challenge to UK wholesaling market leader Matthew Clark.

It is known that John Dunsmore, head of S&N’s UK beer division Scottish Courage, believes a merger could create millions of pounds of buying and cost-saving synergies. The S&N spokesman said: "We never said what we planned to do with the Beer Seller, although there were suggestions from outside at the beginning that it might be sold. "But now we have decided to do some work on how it and Waverley would fit together. It could become a serious speciality wholesaler that could offer the on-trade a range of international beers and unusual drinks that suited their markets."


26 November, 2003