Untangling the Matthew Clark/ Punch Taverns tie-up

MATTHEW CLARK'S role in supplying UK pubs was already complicated enough before Punch Taverns took a 50 per cent stake in it in mid-2007. Acquired by US drinks brand owner Constellation in 1998, the wholesaler - that had thrived largely thanks to Constellation's ownership of the Gaymer Cider Company - was the largest independent wine and spirit distributor in the UK, even before the Punch deal.

So when the joint venture with Punch was announced, things only got more complex. Conspiracy theories abounded about these monsters of the licensed trade having a pernicious influence over pubs' drinks supply. The pubco already controlled the beer through the tie - now it was sniffing around the supply of wine and spirits, some thought. "Too many fingers in too many pies," summed up the general feeling.

One of the upshots was Punch drinks supremo Geoff Brown being posted on a secondment with Matthew Clark. Brown, formerly Punch director of marketing, now product and marketing manager for beer, cider and soft drinks at Matthew Clark, was charged with fine-tuning Matthew Clark's focus on beer. His role also includes overseeing the link between Punch and the wholesaler.

Anyone describing this new relationship in Brown's presence has to choose their wording very carefully - he stresses that it is "not an integration - the two are not becoming one company". Matthew Clark as a wholesaler to many accounts and Punch Taverns as a pubco have retained their independence.

Conspiracy theorists are bound to find sinister intent in whatever Brown says. Statements from him such as: "Our concern is establishing stronger relationships with trade customers, such as Punch, where there's a natural link to the trade customer", could arouse suspicion that there's a desire to see some kind of 'wine tie'.

But then he clarifies that he is referring to the logistics of licensees ordering drinks. With Punch, this tends to be via scheduled telesales calls. In Matthew Clark's case, the licensee places orders pretty much whenever they want.

In his secondment, Brown and Matthew Clark have been talking about how Punch and the wholesaler can learn from each other. The pubco has been addressing making beer orders more flexible for licensees. It is soon to launch online ordering, for example.

Better balance

As well as discussing best practice, another focus of the secondment has been working out how Matthew Clark can become a composite wholesaler - supplying the freetrade with all categories of drinks. Matthew Clark is trying to shift its reputation from being a wine specialist to being a company that can supply wine, spirits, beer and more.

Talking about achieving balance between the different categories, Brown says: "Beer was very important to Punch - because of the tie, that was where it made most money. Here, we have a much better balance because profits are evened out. A wholesaler has to be genuinely open-market competitive.

"Historically, Matthew Clark has been very strong in wine because it was owned by Constellation as a route to market. The idea of me being here is to level all this out, to help Matthew Clark be seen not just as a wine wholesaler that happens to sell other drinks products."

Brown's success in doing this will be weighed up in February. Then, Brown's bosses will decide whether the Punch man's secondment with Matthew Clark will continue. The relationship as a whole, however, is guaranteed to be a long-term one.