HP Bulmer to boost cider sales with South African venture

A new South African venture by Hereford's HP Bulmer is set to boost the group's cider sales.

It has bought the brands and production assets of W&A Gilbey, the South African subsidiary of Diageo's UDV, in a £2.3m investment.

The deal is part of the Strongbow producer's efforts to reverse last year's sales and profits slump.

It has taken a 70 per cent stake in the Gilbey joint venture alongside South African brewer Bavaria Brau, which already distributes Bulmer's Scrumpy Jack in South Africa.

The deal will boost Gilbey's cider brands, Hardys, Crossbow and Merriman, although these will not be launched in the UK.

It will also help Bulmer to increase sales of Scrumpy Jack in South Africa, with longer-term plans to look at introducing Strongbow.

International director John Harvey said: "This gives us entry into the second biggest cider market in the world."

Diageo sold the cider brands so its subsidiary, formerly part of Grand Metropolitan, could focus on the Gilbey's, Smirnoff, Bell's and J&B Rare brands.

About 20 per cent of Bulmer's earnings come from international sales after it began making cider in Australia, Belgium, New Zealand and the United States. Chief executive Mike Hughes said the plan was to boost this to 40 per cent within five years.

Spokesman George Thomas said: "We have a strategy of developing our earnings from overseas but the UK will always be the core of our business and we will be ploughing investment heavily behind our brands and building our market here."