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Inverarity Morton acquires Forth Wines

Scottish independent wines and spirits merchant, Inverarity Morton (IM), has bought Forth Wines for an undisclosed seven-figure sum.

 The announcement comes just two years after Wm Morton’s merger with Inverarity Vaults, a move that led to IM becoming Scotland’s largest privately owned drinks distributor.

The deal will see IM gain an even stronger foothold in the marketplace in Scotland, where it already supplies over 2,000 customers in the licensed trade sector. The enlarged company will have a combined turnover of circa £75m with a workforce of over 200.

Stephen Russell, managing director at IM (pictured left), explained the key motivations for the purchase: “There were a number of factors that attracted us to Forth Wines,” he said. “Over the last three years, the directors have helped steer the business on a strong growth path and they now occupy a premium space in the market.  Volume-wise, they sell about as much wine as we do in a year and that’s no small feat.  Our wine portfolio is one of our biggest selling points and one we work tirelessly to ensure it remains unequalled on breadth, depth and value.

“Forth Wines has exclusive representation in the UK for a number of great brands including Chocolate Box from Australia, Lomond Wines (South Africa) and, in Scotland, for Bodegas LAN (Spain).  So the first project our buying teams will get stuck into is integrating and expanding the wine list.”

He also added that Forth Wines’ site in Milnathort, which spans 75,000sq ft, would enhance the company’s own distribution capability.

“At the moment we handle all deliveries from our warehouse in Glasgow, which is already running at capacity.  Having a second depot in Milnathort will make a big difference to our logistics operation by helping reduce road miles and improve delivery schedules.  We will be far better placed to service customers throughout the whole of Scotland.”

Extending IM’s reach south of the border was another draw for Russell as 22% of Forth Wines’ business is generated in England, compared to less than a tenth for IM.

“Although the focus for me is still Scotland, the deal certainly paves the way for us to go more aggressively into England, where sales at present account for a much smaller share of our overall turnover.”

In the initial three months, the two companies will continue to run independently. Russell stressed the importance of allowing time for the business to settle and staff to acclimatise before making key decisions for the future.

“I don’t want there to be any disruption to our customers throughout this transitional phase so both businesses will operate as normal until the turn of the year,” he said.

Russell has pledged there will be no net job losses at Milnathort, citing instead a need to recruit in logistics to meet the increased distribution need.

Russell added: “We manage our own distribution and this function will be enveloped into the larger company within the early part of 2014.  That will mean recruiting to manage the increased workload.”

Of the four directors from Forth Wines, two will move to IM.  Ian Cumming will join as commercial director with Alan Cramond assuming the role of director of finance.  For IM’s sales director, Donald Campbell, the deal re-establishes a longstanding link with Milnathort, where Campbell served some 20 years at Forth Wines.

Ian Cumming said: “This is great news for Forth Wines as it provides a platform within a Scottish-owned independent business to build on the successful growth we’ve achieved over the past three years since acquiring the company. 

“Like Forth Wines, Inverarity Morton has a number of inherent qualities to bring to customers.  For example, both businesses have invested heavily in developing market leading training propositions for the independent trade in Scotland.  I look forward over the coming months to working as one team and combining the best of both worlds.”

Forth Wines was bought from Matthew Clark in 2010 by the quartet of George Thomson, Ian Cumming, Ewen Cameron and Alan Cramond, backed by private investors.  The merchant, which employs 51 staff, increased year-on-year turnover in 2012 to £24m.

Owned by the Bulloch family, Wm Morton began trading in 1945.  In 2011, Wm Morton merged with Inverarity Vaults, then taking over boutique spirits wholesaler LA Wholesale in November 2012.  The company employs 162 people and turns over in excess of £50m.

28 October 2013 - Felicity Murray The Drinks Report, editor