Scottish & Newcastle sells its French wholesale business
In keeping with S&N’s western market strategy of focusing efforts on consumers and customers to build brands and grow revenue, the company announced that it will sell part of its loss-making French wholsesale business.
On 20 November 2007, S&N reached an agreement with Centrale Européenne de Distribution ("C10", the largest independent French wholesaler) to sell a large proportion of its wholly-owned French on-trade distribution businesses for about GBP 85 million.
The company behind Newcastle Brown Ale, Strongbow cider and Kronenbourg 1664 said that unseasonable weather had posed a particular challenge in France, where its core brands lost 0.5 percent of their market share.
In an attempt to mitigate its position, S&N has agreed to a sale of Elidis, its French wholesale distribution business, to C10. Noting that the division was an "ongoing drag" on performance, S&N’s finance director, Ian McHoul, reportedly said the transaction would help to simplify the company’s operations in France.
S&N said it expected the division would make a loss of GBP 12 million this year, while the sale would have an immediate positive impact on profitability and cash flow.
