3 March 2009
South African wine and spirits producer Distell has made its first fully-fledged international acquisition, with the purchase of the renowned cognac brand Bisquit from Pernod Ricard for €31-million (about R390-million).
The deal gives Distell, the world’s fourth-largest brandy producer, the inventories of Bisquit’s finished cognac, as well as stocks of eau-de-vie (cognac distillate) currently in maturation. However, the purchase excludes Bisquit’s Lignieres castle and its Rouillacais vines in Cognac.
“The deal not only augments our spirits stable with a highly respected international brand, but gives us access to Bisquit’s existing customer base in Europe and Asia for other Distell offerings,” Distell MD Jan Scannell said in a statement this week.”
“At the same time, it enhances our range of brandies that already includes several internationally acclaimed Cape potstills and brings us long-established traditional cognac expertise.”
To avoid any disruption of supply, Distell has maintained existing distribution agreements with Pernod Ricard affiliates in France, Belgium, Switzerland and Luxembourg.
Bisquit will be the first wholly-owned Distell brand to be produced outside Africa, taking the local company further into the mainstream international spirits market, and follows on the company’s joint venture established two years ago with Scotch whisky producer Burn Steward Distillers to produce and market the Bunnahabhain, Black Bottle and Scottish Leader whisky brands in sub-Saharan Africa.
Scannell pointed out that while the South African spirits market had recently been under pressure given the impact of the global financial crisis, Distell had actually increased its share of the segment, and consumers across all alcoholic beverage categories were moving toward premium brands.
“A sought-after name in cognac such as Bisquit allows us to capitalise on the growing South African appreciation for luxury spirits and still further consolidate our position in the local market.”
He added that while there had been a very recent decline in sales of cognac to developed countries because of depressed economic conditions, demand for well-known cognacs had increased substantially in the BRIC (Brazil, Russia, India and China) countries.
While accounting for only 8.6% of brandy volumes sold worldwide in 2007, cognacs command a higher price than any other type of brandy and growth in sales has outpaced that of any other spirit over the past decade.
With an almost 200-year history, Bisquit is a market leader in Belgium, and enjoys a loyal following in Luxembourg, Switzerland, Russia, France, Germany and China, as well as in international travel retail.
It offers an entry-level Bisquit Classique VS, the Bisquit VSOP Fine Champagne and the ultra-luxury Bisquit XO Excellence, with prices ranging from €17 to €100 (R215 to R1 250) a 750ml bottle to cater to a range of income groups.
“We are enormously excited by the potential of Bisquit and are very proud to include a brand of such stature in the Distell portfolio,” Scannell said. “While we believe it will still be possible to maximize opportunities during the current downturn, when the global market recovers we shall be extremely well placed to take advantage of the resurgence in demand for prestige brands with impressive provenance.”
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