Market research
Shares in Distell, the merged South African liquor giant, bred from Distillers Corporation and Stellenbosch Farmers Winery, have recovered slightly after dropping 16 percent since it issued a profit warning on 14 December. After dropping to 680c (16 percent) on Wednesday, shares in the newly merged group picked up marginally to close at 700c yesterday (Thursday), 13.5 percent off the trading figure of 810c on 14 December.
The merger took place on 4 December, but the companies will trade under the Distillers banner until March when it will be officially renamed Distell. Midway through the month the group issued a warning to members of the JSE Securities Exchange, stating that even though the merged company had retained market share in most of its important product categories, the decline in consumer spending in the South African alcoholic beverage industry had resulted in lower sales volumes.
Due to the summer holiday season in South Africa the JSE is very quiet, but was expected to pick up again in the new year.
Group PR Manager for Distell, Bennie Howard, said in Stellenbosch today, "figures for December were a bit more positive than initially expected, especially in the alcoholic fruit beverage and cider sectors.
"As with trends in other consumer goods sectors, people only started spending more on alcoholic beverages later in the month, so there is promise for the festive season."
The entire South African liquor industry has been hit by a downswing in alcoholic beverage consumption during the course of the past year, with only vodka, AFBs showing any real growth, while wine sales have grown marginally. Beer sales in South Africa have taken a pounding.
The Distell group is in the process of rationalising its operations and this is expected to continue well into the first quarter of 2001, while at the same time senior management is planning its international strategies.
Companies: Distell, Pernod Ricard
