No end to wholesale woes

OCTOBER 8, 2012 will go down as a dark day in the Scottish licensed trade’s history.

Administrators acting on behalf of WaverleyTBS announced that there would be no recovery for the stricken wholesaler. It was a sudden and dramatic end for a distinguished and long-established company, which had only entered administration on October 2.

Of course, no sooner had the shock set in than Waverley’s rivals were moving quickly to profit from its demise – such is the nature of business.

On that basis, the disruption caused to Waverley customers will hopefully have been kept to a minimum: with so many alternative sources of supply eager to take its place, no one should have had stocking issues for long.

That there is plenty of choice for operators when it comes to the wholesale market is likely to have been one of the reasons why Waverley went down in the first place.

Not everyone in the drinks wholesale industry believes that there is a situation of over capacity in the market (perhaps some just don’t want to admit it). But there seems little doubt that companies have been battling for a share of a diminishing market in recent years. The amount of pubs and other on-trade businesses that have closed since the economic downturn began tells you that.

The flip side of the coin is that the intense competition in the drinks supply business has, in some ways, been good for the on-trade.

As wholesalers have strived to retain customers, they have upped the service they provide in various ways. There has been talk of wholesalers offering more flexible credit terms, and in the case of the wine suppliers, a notable increase in support for outlets in terms of wine list development and staff training. There has also been more concerted moves into online ordering, giving greater flexibility to operators in buying terms.

If anything, with no immediate signs of economic recovery, the wholesale companies are going to have to find even more ways to support the trade.

Not only is this good for pubs, hotels and restaurants (and consumers in return), but for the wholesale sector itself.

Unfortunately, this will do nothing to help the many hundreds of staff (685 at the time of writing) who have already been made redundant by Waverley.

That amounts to an awful lot of families up and down the UK who have lost a salary, who will be very worried about where a replacement is going to come from in these austere times. Many will be highly skilled and more than capable of doing similar jobs for other companies in the sector, but given the intense competition that exists in the drinks wholesale market it’s hard to see how many will remain in the sector. Indeed, if predictions of further consolidation are to come true, the job market is only going to get tighter in the world of drinks wholesaling.

The end of Waverley might bring a short-term boost to some of its rivals, but I suspect the problems have only just begun for the wholesale market.