5 September 2012
South African wine and spirits producer Distell has expanded its global presence with the acquisition of a 60% share in fast-growing Chinese liquor distribution firm CJ Wines & Spirits, the company announced on Monday.
CJ Wines & Spirits is based in Zhongshan in the Pearl Valley Delta of Guandong province in southeast China and has operations in Hong Kong, Macau and mainland China.
The stake was purchased for an undisclosed sum.
The new venture – now trading as Distell China – is headed by managing director Rody Wong, who previously ran CJ Wines & Spirits.
Wong has established a strong support base for cognac brand Bisquit that Distell bought in 2009.
“The partnership with Distell creates the opportunity to accelerate the excellent progress achieved thus far with two of the company’s major brands Bisquit and Amarula,” Wong said in a statement.
Wong said that Distell China’s focus will be on building the presence of Bisquit in the southern part of the country initially. South China is referred to as the country’s “cognac belt” as this is where most cognac is consumed.
The Far East is now the world’s biggest importer of cognac, with turnover exceeding US$1.25-billion.
“CJ’s conversancy with the cognac market is an important asset, and we plan to bring this expertise in marketing to retail and on-consumption channels, to Amarula, which is currently one of the fastest-growing spirits brands worldwide,” Wong said.
According to Distell Group managing director Jan Scannell, the plan is to capitalise on the strong market potential of South China and then address markets such as Beijing, Shanghai and Chengdu.
“The new venture will carry spirits and wines from around the world, and that obviously gives us the scope to explore avenues for some of our other brands,” he said.
He added that the priority for Distell China was to focus on Bisquit and Amarula before considering other brands within the company’s portfolio for distribution.