KWV Kollapse

The news from the inappropriately named La Concorde (“harmony”) HQ of KWV today is dire, but not as dire as Just-Drink would have it. JD reports KWV’s core wine and spirits business swung to losses of US$998m in the year to December which is almost ten times the company’s market capitalization. The other bombshell from JD is that KWV “is still open to suitors.” Huh? I thought Marcel Golding had won fair maiden.

Marcel Golding: a desperately needed new broom for KWV

Marcel Golding: a desperately needed new broom for KWV

A closer look at KWV’s results confirms just how well Distell did to increase profits. The subscription only caverns of JD report “Many of its UK listings were dropped and KWV’s global sales sank from about 2.5m cases to 500,000 cases. Global net sales fell by 9% to ZAR360m, although high-end wines and brandies showed growth in Japan and China. KWV’s CEO, Thys Loubser, said of the UK: ‘We can’t continue subsidising wines in that market.’”

The KWV UK meltdown happened after the company increased prices, confirming that it’s all very well for WOSA (Wines of SA, the exporters’ deep throat) to advise producers to move to higher price points but the trick remains getting UK consumers to buy product. Meanwhile the sound of back slapping from rejected suitors Pioneer Foods is deafening as Jannie Mouton and the manne celebrate their noue ontkoming “narrow escape” after their takeover bid was rejected.