Lost liquor worth $30m

By Dita De Boni

Lion Nathan-owned NZ Wines & Spirits has lost an important international account to import and distribute key liquor brands on behalf of Kentucky-based Brown-Forman Corporation from February 2000.

The loss of the 15 year-old account - with a retail value of $30m in sales - is the latest in a string of shifting allegiances in the global liquor industry to reverberate in the New Zealand domestic spirits market.

Brands lost to NZ Wines & Spirits include Jack Daniel's Tennessee Whiskey, Southern Comfort, Early Times Kentucky Bourbon and Pepe Lopez Tequila.

Jack Daniel's is New Zealand's largest premium spirit, with the combined bourbon and Southern Comfort portfolio commanding around 30 per cent of the "American whiskey" market in New Zealand .

Earlier this year NZ Wine & Spirits acquired thelocal business of global liquor giant Diageo off DB Allied Liquor Merchants, taking on board key brands such as Johnnie Walker whisky, Gordon's gin and Stolichnaya vodka and causing a heavy blow to DB's non-beer and wine business.

Lion Nathan's director of investor relations, Warwick Bryan, says Lion anticipated losing some brands when it took on the Diageo business, although he would not confirm the Brown-Forman account was lost as a direct result.

Mr Bryan played down the loss of the brands, saying the Diageo business would buffer Lion against profit losses.

"Brands move around all the time," he said.

Area manager for Brown-Forman in New Zealand, David Ross, told the Business Herald the move would mean a sizable loss to Lion.

He said Brown-Forman had been discussing the break with NZ Wines & Spirits for months, wanting distributors with more of a "single-minded" focus.

He declined to comment on who would inherit the account.

"Brown-Forman have very aggressive goals - we want to move Jack Daniels from number three to number one [whiskey] brand in the world," he said.

"We wanted more aggressive attention paid to [our] brands."

In Australia Brown-Forman beverages are distributed by Swift & Moore, which was 50 per cent owned by Lion Nathan until July this year when its shareholding was sold to British-based food, drink and hospitality group Allied Domecq, makers of Canadian Club whiskey, Kahlua and Tia Maria liqueurs and Beefeater Gin.

Large-scale consolidation in the New Zealand liquor market - including the rationalisation of Robbie Burns outlets and the amalgamation of Seagrams and Fosters in Australia and New Zealand - has occurred in the wake of falling alcohol consumption and the spector of increased competition from supermarket-sold beer.