South African liquor company Distell is expanding its presence in the East with the acquisition of a 60% share in fast-growing liquor distribution company CJ Wines & Spirits, for an undisclosed amount.
Privately owned CJ is based in Zhongshan in the Pearl Valley Delta of Guandong province, and has operations in Hong Kong, Macau and Mainland China.
Rody Wong, who previously ran CJ Wines & Spirits, will head the new venture, which is now trading as Distell China. Wong, a former Apple and Seagram executive, who has worked in the US and Asia, has established a strong support base for cognac brand Bisquit, which Distell bought in 2009.
Wong says that Distell China’s focus would be on building the presence of Bisquit in the southern part of the country initially, which is referred to as the country’s ‘cognac belt’.
According to French trade body Bureau National Interprofessionel du Cognac (BNIC), cognac exports to China are “surging”. The BNIC reported that for the 12 months to June 2012, year-on-year volume and value levels exceeded all past records, with producers shipping the equivalent of 168.5-million bottles of cognac, worth $2.8-billion.
Demand in the Far East has outpaced other regions, where volumes rose 9.9% and value, by 21.4%. Asian countries imported 61.8-million bottles of cognac during the period, with China’s consumption, in particular, surging.
The Far East is now the world's biggest importer of cognac, with turnover exceeding $1.25-billion.
“CJ’s conversancy with the cognac market is an important asset, and we plan to bring this expertise in marketing to retail and on-consumption channels to Amarula, which is currently one of the fastest-growing spirits brands worldwide,” Wong said.
According to Distell Group MD Jan Scannell, the plan is to capitalise on the strong market potential of South China and then address markets such as Beijing, Shanghai and Chengdu. “The new venture would carry spirits and wines from around the world, and that obviously gives us the scope to explore avenues for some of our other brands.”