Around 40% of UK’s wine wholesalers and distributors are considered to be well-placed to cope with any potential fallout from the country’s decision to exit the European Union, according to recently-published research, although almost a third could struggle.
A report from market analysts Plimsoll Publishing, released earlier this month, is based on a “financial health check” on 1,223 wholesalers and distributors in the country. The results claim that 483 firms are performing well in current market conditions, and should be able to weather any uncertainty in the sector.
However, of those companies covered in the report, 387 need to put either “early prevention measures” or “urgent plans” in place to prepare for the future.
The study identified and analysed the vital areas of business performance that lead to success or failure. These factors were then applied to the 1,223 companies to highlight both the fittest and those showing signs of serious financial weakness. Depending on the overall financial health, each company was given one of five health ratings:
- 483 firms rated Strong – these firms are the fittest in the industry and are showing strong financial health
- 114 firms rated Good – these firms are improving financial health and can aspire to those rated Strong
- 168 firms rated Mediocre – these firms could go either way, they need to fine-tune their business so they do not slip back
- 168 firms rated Caution – these firms are showing the early signs of weakness; early prevention measures need to be put in place
- 219 firms rated Danger – these firms are showing a serious weakening in financial health; urgent plans are required to treat these weaknesses
“Since the decision to leave the European Union, the UK market has been dogged with speculation and uncertainty,” said Plimsoll’s senior analyst, David Pattison. “Our latest research, however, suggests the majority of wine wholesalers and distributors are surprisingly well-placed. That’s not to say there will not be an impact, but they are in good shape to cope and respond to any upheaval.”
Pattison continued: “Nobody at this early stage will know the consequences of the Brexit vote, However, companies who are rated as being in danger have two options: they can hold their nerve and hope to trade their way out, or they can put a survival plan in place and look to consolidate their business.
“Once they take notice of the warning signs, then these companies need to act.”