E&J Gallo, one of the leading names in the take-home wine sector, is set to flex its muscles in the on-trade following a strategic link-up with Waverley Wines and Spirits. As part of the agreement, the Californian winery will be solely represented and distributed in the UK's pubs and bars by Scottish & Newcastle's wine division.
The E&J Gallo portfolio includes brands such as Turning Leaf, Garnet Point and Sierra Valley and more than four million cases were sold in the UK last year.
Despite a strong presence in the take-home market, the on-trade sector has remained relatively untapped until now.
David Bradley, E&J Gallo's sales director, said: "This strategic alliance is a significant move for us and demonstrates our determination to make in-roads into the on-trade market.
"As a sign of our commitment, we are investing substantially during the coming years. We are confident this partnership with Waverley will potentially lead to further developments such as joint sourcing and branding initiatives."
Hew Dalrymple, marketing director of Waverley Group, said: "For pub wine, we're rapidly moving to a branded situation. Because brands are what the consumer is after, we're focusing on a series of recognised 'drive' brands, such as E&J Gallo, which are then backed up by a second tier of wines.
"We think that we now cater for all consumer types with fantastic wines and different price points."
Last month, E&J Gallo re-launched its market-leading Californian wine brand - Wine Cellars - with a new name, Sierra Valley, packaging and advertising campaign. The brand places emphasis on the wine's Californian roots and £7m has been set aside for marketing.
E&J Gallo's decision to join forces with Waverley Wines and Spirits is the latest example of consolidation in the UK on-trade wine sector. Australian winemaker BRL Hardy was recently acquired by Constellation Brands, the US group that owns the rival wholesaler Matthew Clark, in a deal designed to strengthen the hand of brands such as Hardys Stamp and Banrock Station.
Pictured l-r: David Bradley, E&J Gallo sales director, and Hew Dalrymple, marketing director of Waverley Group.