42 Below outsourcing distribution to Lion Nathan

Photo / Supplied

Home-grown vodka company 42 Below is laying off 22 of its 40 local staff and outsourcing the distribution of its products.

Lion Nathan will now distribute 42 Below vodka and all of parent Bacardi's brands. The brewer currently does 42 Below's bottling.

Previously Hancocks Wine and Spirit Merchants had distributed Bacardi products. Bacardi bought the then publicly-listed 42 Below for $138 million in 2006.

Managing director Paul Dibbayawan said 42 Below's current distribution model was unprofitable.

"We were in an unsustainable situation, and this really allows us to get the distribution right.

"It's really about ensuring we have that solid foundation here in New Zealand which will allow us to take the 42 Below brand global."

The company has also stopped making its other spirit products such as Seven Tiki white rum and Tahiti Dark.

Dibbayawan said it still held the brands but had decided to focus on 42 Below for the time being.

"It's far better to build that brand because that's really the iconic brand that we want to drive going forward."

42 Below has yet to make a profit. In the year to March 2008 it made a $20.2 million net loss, on revenue of $16.7 million. This compared to a loss of $27.2 million on $10.3 million in revenue in 2007.

Dibbayawan said the company remained loss-making this year.

He said it had been a tough year and the company had seen slight declines across its brands.

Unifying with a sole distributor allowed for maximum exposure of its brand portfolio. Lion Nathan had excellent reach into the hospitality and retail trade, he said.