Distell goes down-market in UK

Cape Town - Wines and spirits producer Distell is hoping to boost its export sales this year by going down-market in Britain. What the company is calling its "new value-label" wine is being listed by Threshers, a UK retailer with more than 1 000 outlets across the country.

Forming part of the Two Oceans brand, the entry-level tier is targeted at budget-conscious Britons feeling the economic pinch, with all three varietal wines in the range retailing for below G£5 (R70) a 750ml bottle. International director Donald Gallow said the new offering has been priced to perform in the value segment "to allow consumers with diminished disposable income to still enjoy their everyday glass of wine". The new range is called Danger Point.

At the same time, the company is increasing its business with Waitrose in the UK.

Gallow said on Tuesday that the latest deals had been landed on the back of Distell's increase in packaged wine exports, achieved with such brands as Two Oceans, Nederburg, Drostdy-Hof, Obikwa, Zonnebloem and Durbanville Hills.

He declined to give details of sales increases, but confirmed that they comfortably outpaced the climb in the South African industry's packaged wine sales volumes offshore. According to the latest available statistics from SA Wine Information Systems, the country's packaged wine exports for the six months to November 2008 increased by 21.8% compared with the same period in 2007.

"Although the value segment does not represent the major thrust of our wine business, we believe it to be an appropriate focus in the current downturn," said Gallow. "Nevertheless, we are optimistic of growth across all our price points and are encouraged by the positive projections for global wine consumption issued earlier this month by the International Wine and Spirit Record, which predicts that the financial and economic crisis affecting many wine-consuming countries worldwide will have 'limited' consequences for the growth of the wine sector."

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