Guinness UDV loses major spirits account
GuinnessUDV (GUDV) has lost the rights to distribute Jack Daniel's whiskey in the UK after US owner Brown-Forman decided to strengthen its links with rival company Bacardi-Martini.
The Kentucky-based spirits company has decided not to renew its 15-year distribution agreement with GUDV choosing instead to forge a cost-sharing alliance with the rum maker.
A spokesperson for Brown-Forman, speaking from the US, said: "GuinnessUDV has done a great job but the move to Bacardi-Martini gives us a great opportunity to improve our profit margin in what is our second biggest market."
The move, which will see Jack Daniel's, Southern Comfort and Woodford Reserve switch stables from August 1, is being seen as a huge blow to GUDV although the company is taking a positive view.
Don Goulding, managing director for GUDV in the UK, said: "The end of this agreement frees us to take full advantage of the competitive environment with other brands in our portfolio, new innovation and our recently acquired Seagram brands, including Captain Morgan and Bulleit whiskey which compete on similar consumer occasions."
In the last financial year, the Brown-Forman brands added a reported trading profit of £12m, both Jack Daniels and Southern Comfort boast high volume sales (425,000 and 280,000 cases respectively) while Woodford Reserve is an established player in the style bar sector.
Brown-Forman's decision to switch distributors comes only months after GUDV completed the acquisition of Captain Morgan, Morgan Spiced and a number of brands from the now defunct Seagram.
The addition of the Brown-Forman brands is further evidence of Bacardi-Martini's intention to become a major player in the UK spirits market.
The new arrivals will complement a white spirit portfolio that boasts the omnipresent Bacardi Rum, Bombay Sapphire gin and Finlandia vodka - a brand part-owned by Brown-Forman.
The two companies will maintain separate and dedicated marketing groups.
Brown-Forman will own the inventory of its goods in the U.K., but Bacardi will handle warehousing and the logistics of distribution.
