A major brewer is in talks to acquire Bargain Booze owner Conviviality after the wholesaler announced it is to enter adminstration.
The company has filed notice of intention to appoint administrators this morning (29 March) after failing to secure the £135m investment it needed to cease trading. In the statement, Conviviality said unless circumstances change, it will appoint administrators within 10 days.
Industry sources said a major brewer is already in talks to acquire Conviviality, including Bargain Booze. However it is rumoured that the brewer is waiting until as late as possible in order to get the best possible deal.
Describing funding negotiations a statement from Conviviality said: "There was ultimately insufficient demand to raise the full £125m." An earlier statement from the wholesaler said it would be unable to continue without the funding.
A statement released by Conviviality's board said that the business would continue to trade while it looks for a potential buyer. However, suppliers have told Retail Express that credit lines have been withdrawn and the wholesaler must pay upfront for all goods.
The livelihoods of 2,500 Conviviality staff at risk and Bargain Booze franchisees told Retail Express they fear severe damage to their shops. There are more than 350 franchisees who manage at least 700 Bargain Booze stores.
One supplier working with Conviviality told Retail Express: “The signs have been getting worse over the last few weeks, issues with payments and an increased sense of nervousness within the company.”
Showing the importance of Conviviality to both the on and off-trade, Budweiser owner AB InBev issued a statement urging shareholders to get behind the struggling wholesaler in order to prevent shock waves from spreading throughout the alcohol industry.
The wholesaler had expanded aggresively in the past three years, with a one store opening a week target running since 2015 and acquisitions of rival alcohol wholesalers Matthew Clark and Bibbendum.
The news comes after a turbulent week with Kerryfresh entering administration and Zapper abandoning its convenience channel rollout plans.