RSM to administrate Northern Ireland drinks maker
RSM has been called in to administrate a drinks company set up by one of Northern Ireland's best-known industry figures. Botl Wine and Spirit Merchants was established by industry veteran Jim O’Neill, and while it became an industry leader in the distribution of spirits, heavy investment in new gin and rum offerings has seen the firm over-stretch before folding.
2017 saw another bumper year in UK gin sales, with over 50 million bottles sold for the first time, worth £1.2 billion. With such demand in Britain for gin, it is no surprise that the 21st century gin craze has led to a boom in the number of businesses centring on either distilling or selling the spirit, with a growing number of ‘gin palaces’ doing both. However, the trend has understandably drawn comparisons with the great wine bar bubble of the 1970s and early 80s, and like the wine bar craze, the bubble is finally showing signs of bursting.
After almost a decade of exponential growth in gin sales in the UK, the collapse of a firm previously riding high on that wave of consumption suggested that others in the crowded sector might soon feel the pinch. Now, just weeks after Begbies Traynor was appointed to oversee the administration of GinFestival.com, which encountered financial troubles having over-stretched its e-commerce platform, another business placing its hopes on gin consumption has folded.
This time, it is a spirit producer itself which has collapsed, as Botl Wine and Spirit Merchants has gone into administration after financial difficulties, culminating in the loss of at least 10 jobs. The Belfast-based company entered insolvency proceedings following an extended period of product expansion, which notably saw the organisation spend £500,000 to launch Butterfly Cane Rum, an import from Trinidad sold in supermarkets including Asda, and Belfast 1912 Cask Gin, which announced a listing with Tesco last year.
Botl was launched by drink industry veteran Jim O'Neill – a former managing director of United Wine Merchants – in 2007 as a drinks wholesaler and distributor. O’Neill’s son Conor is sales director. While the group was profitable initially, margins had notably tightened in Botl's most recent accounts, with it reporting in the year ending September 30, 2015, that turnover had reduced to £10.7 million, down slightly from £11.7 million a year earlier, while pre-tax profits were down from £137,000 to £109,000. Moves in the gin and rum market were designed to appeal to new customers to buck this trend, with O'Neill commenting last year that the launch of Butterfly Cane Rum had been part of a bid to target a younger drinker.
The firm is likely to have fallen victim to heightened competition amid a bloated spirits market, but also to Brexit pressures, as importing ingredients for production with a pound decreasing in value will have become more pricey since 2016. Global consulting network RSM has been called in to oversee the winding down, with Stephen Armstrong and Jeremy Woodside being appointed joint-administrators.
A spokesperson for RSM said of the news, "The company was a leading distributor and wholesaler of wine and spirits working with bars, restaurants, retailers, wholesalers and national multiples across Northern Ireland and had 10 employees… The company was unable to continue to trade due to financial difficulties, so the decision was made to appoint administrators. All employees have been made redundant and administrators are working with them regarding their claims."
Related: RSM UK rescues boutique hotel with sale to Leeds entrepreneur.
