Distell called “third world”


Well the market sure liked Distell’s R2.2 billion purchase of Burn Stewart Distillers on Monday with the share price at an all-time high of R117.90 this afternoon – which makes investment company CapeVin worth R7.37 a share against the current price of R6.35 – but the booby prize must go to the Vunani Securities analyst quoted in Business Day yesterday: “it is not every day that a third-world drinks company can get to buy a first-world marketing brand.” Huh? So is Distell’s Amarula not a first world brand or Savanna, made by the second largest cider maker in the world?

ama 300x248 Distell called “third world”

The analyst keeps on digging with the comment that recent transactions “show that there’s a mindset change inside Distell — it shows that they are prepared to move outside of their traditional comfort zone of being market leaders in Southern Africa.” Huh? Distell bought Bisquit Cognac back in 2009 while exports to Africa have been a feature of many an annual report. Heck, Lieberstein was the world’s largest selling bottled wine in the 1960s. Narrower than the waistline of a gnat are the memories of some market analysts.

Disclosure: the author is a shareholder in CapeVin.