Over the past 48 hours it’s become increasingly likely that Conviviality, a massive wine conglomerate in the UK with market leading wine shops and on trade sales companies, are facing administration. I’ve known people both within the company and analysts looking at the company for the past 12 months, and to many people this should come as no surprise.
First and foremost, let’s have it right, our thoughts must go out to all the estimated 2,500 employees facing incredibly uncertain futures. Those working at individual parts of the company, like Bibendum, Matthew Clark, or the Wine Rack may be ok. For large drinks trade groups it’ll be cherry picking time, and hopefully that will mean job security for many, although this may take months to sort out.
Conviviality as a company and a business model, however, will likely struggle to have much sympathy. The three recent body blows (reduced earnings warnings, huge unpaid tax bill, scramble to raise £125m) will take a lot of attention. But looking into the aggressiveness of what Conviviality stood for for a few years now had always made me, and clearly investors, uneasy.
They looked to weaken, divide, and conquer. Target rivals to price out of the market and put out of business. I have a few names in my head that it’s best not to mention that was a relatively open secret that was what they were doing. Don’t worry about making money, put others out of business, then shovel the shit at the end.
I know quite a few employees at the head office in central London. It’s been hard for me to see the slow decline in morale in the last 12 to 18 months in good friends who deserve better. Pressure to work long hours, 7 day weeks, and then pay them far less than would afford a half decent bedsit a 30 minute commute away? Is that some kind of fucking joke? Cos I didn’t see many people laughing. I worked in a high pressure corporate environment for many years, but me and my colleagues at least got a decent wage. Being a corporate slave is only worth it with some form of upside. I think they forgot that.
This is clearly a wine company that played at being a corporate. But with an aggressive business model that demanded high volume, low margin, and nothing rocking that boat ever, can any of us really be surprised at what they’re facing?
I’m worried that this post sounds like putting the boot in when people are down. I disagree. I wish only the best and a quick solution for the employees by all means. But we all need to look long and hard at what’s happened, and hope many hard truths and tough lessons are being learned at board levels across the industry. And if they manage to avoid administration let’s hope they change their tune in the future.
Cheers
