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UK: Virgin Wines takes over Wine Planet's UK operations

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Virgin Wines, the UK wine e-tailer, has announced today it will take control of Australian rival Wine Planet's UK operations as the online giant retreats down under to consolidate its interests.

The deal allows Virgin Wines to fulfil Wine Planet's obligations to its UK consumers which entails hosting its website and handling its UK logistics, including sales and distribution, plus Virgin Wines acquires Wine Planet's existing stocks.

Rob Hawkings, financial director Wine Planet Holdings, (and a director of the UK operation) told just-drinks.com that Virgin Wines would receive around "one and two thousand cases, small amounts of fine and rare wine, plus larger quantities of more commercial wine."

Virgin Wines were "very pleasantly surprised at the quality of the stock", said Chris Mitchell, virginwines.com's marketing director. For example, there are 14 consecutive vintages of Grange and "the fine wine portfolio is extensive," he said.
Wine Planet set up a stand alone operation in the UK with its own warehousing and transport. The warehouse has now been closed and all future orders are to be processed by Virgin with immediate effect.

Virgin Wines hopes to integrate the Wine Planet operations where possible but admitted some "costs will be cut". In the future, consumers clicking onto the Wine Planet site will go through to an affiliate site created by Virgin Wines but branded with the Australian company's logo. Specialised offers, however, from Australia and the international wine markets via Wine Planet's parent site will still be available.

"The real reasons for the change came from Australia where the Australian dollar investment costs were thought to be unacceptably high. When we first came to the UK it was anticipated that we would have equity partners. But because of the changing economic climate in e-commerce generally this didn't happen and we were determined to work in the UK with the funds allocated. To achieve our original aim would have meant a much bigger investment than it was felt was justified,"

Hawkings told just-drinks.com. "Virgin is the clear leader in the UK e-tail market in terms of volume so we approached them. We had been talking on various matters before and had identified a long time ago that we had a duplication of resources," he said.

Elliot Lane


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