Trade must move with the times, says Cochrane

By Emily Kearns, Richard Siddle

Published: 16 August, 2013

Traditional wine intermediaries and distributors risk going out of business if they do not adapt and move with the changing face of the industry, according to Richard Cochrane, head of Spanish producer, Félix Solís, in the UK.

Traditional wine intermediaries and distributors risk going out of business if they do not adapt and move with the changing face of the industry, according to Richard Cochrane, the head of Spanish producer, Félix Solís, in the UK.

He said a combination of changing trade demands, pricing pressures and intransigence from the banks meant those in the middle working on low margins are more exposed than ever.

"There are constant challenges for intermediaries and everyone is finding it hard. Wine is under immense price pressure in the competitive UK market, he said.

"For those in the middle, this squeeze can mean the difference between having a business and sadly not. For most, there is already little manoeuvre to weather any risk. Banks will not help long term. Eventually they will apply more normal levels of interest on businesses that make low margins. In my opinion, the current model will have to change beyond recognition and those that don't change won't survive," he added.

He was speaking to Harpers as he revealed plans for the Spanish giant in the UK and why it has set up a standalone operation in the country for the first time. Félix Solís bought back control of its distribution in the UK from wine agency, Free Run Wines, last month.

It is not the first time Félix Solís has set up a division outside of Spain as it has had offices in China going back as far as 1988.

"The direct model is a growing trend in the UK. Concha y Toro has done it well. Spanish wine is also the fastest growing country in the UK off-trade and from this springboard I hope to drive further exploration for the consumer of the diversity Spain offers."

He added: "Our direct model offers economies of scale. We own wineries and have secure contracts with grape growers to ensure supply. Our scale gives us glass-purchasing clout; we can manage contract packaging and have an extremely modern central warehouse and logistics infrastructure. Félix Solís is investing €50 million over the next five years to install two new lines that will be able to produce lower-volume, higher-premium wines but at an affordable cost to the customer. This will be attractive to the specialist market and on-trade in particular."

He said he looked forward to bringing a wider selection of Félix Solís' wine range to the UK, including a potential new investment in Chile. "We are not ruling out other Spanish-speaking countries but Chile will be our first target."

You can read the full interview with Richard Cochrane here.

Printer friendly version