SOUTH AFRICA: Distell loses Martell
Distell has come off lightly in its drawn out merger battle, losing its full licensing agreement to produce, market and distribute the Martel brandies in South Africa.
To a lesser extent Distell and KWV Limited will in future not be allowed to have directors serving on each others boards, while neither would be able to distribute each others products, including the present agreement whereby Distell distributes certain KWV premium brandies and fortified wines, The South African Competition Tribunal has decreed.
"We appreciate the Tribunal's mature approach to a difficult issue," Distell MD, Jan Scannel, said on hearing the outcome.
He believed the creation of Distell was intended to enhance the international competitiveness of the South African wine and spirits industry. In avoiding the undue disruption of Distell's business, the Tribunal has effectively taken a constructive step towards realising this goal.
Distell was also relieved that further job losses were prevented.
It is ironic that the company spent millions of Rands fighting a court case to retain the Martel brand, which it had produced and marketed for nearly 40 years.
Martel belonged to Seagram and was ceded to Pernod Ricard when the latter, together with Diageo, bought out the former two years ago.
The agreement reached in terms of the transfer, including an undisclosed compensation, will mean that Pernod Ricard will assume full control of the brand on 1 July 2003.
KWV will take over the marketing of its brands on 1 July 2003, but because it does not have the necessary domestic distribution capabilities, Distell will still handle distribution until 30 June next year.
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