Consolidation in the drinks industry continues with Lion Nathan’s takeover of 12 Kiwi brands. The Japanese-owned company is looking to make itself a one-stop shop for retailers and bars so it’s bought sparkling wine brand Lindauer and other lesser-known labels to bolster its limited wine portfolio here.
Why would you they buy Lindauer? Volume and brand equity? They are two likely reasons but Lion says it is ‘not going to go into the details of the joint venture arrangement,’ at this stage. The largest New Zealand-produced sparkling brand is piled high in the supermarkets but it’s usually discounted; Corbans is a well-established Kiwi brand but it’s not exactly super-premium – and I’ve never even heard of some of the other brands like Twin River, Bensen Block and Huntaway.
Lion wants to become the ‘one-stop shop’ says Lion’s NZ managing director, and the extra volume gives them more clout. Retailers are increasingly looking to cut costs and streamline businesses, and if Lion can offer them a wide range of beers, wines and spirits in one transaction it reduces their purchasing and logistics costs. Meanwhile in the on-trade, bar owners are offered loans and cash incentives if they sign exclusive deals with big boys like Lion. This ties them in for 3-5 years but means they must buy solely from the Lion portfolio.
Does this reduce choice for consumers? Yes, it does and this process of the big getting bigger will continue. But don’t fret: despite this corporatization of the wine industry, it remains highly fragmented compared to other consumer goods ‘with only 12.8% of the world’s wine produced by the top 10 wine companies,’ ( Liz Thach). Most of the world’s wine is still produced and sold by small wine companies. While this will continue , there will always be small, passionate, and successful producers.
