Sunday, 28 October 2012

Good News for the Sector, and for Garvey 28.10.12


The Audiencia Nacional annuls Sherry sector fines for agreeing grape prices.

The Audiencia Nacional (National Court) has annulled fines imposed on the Consejo Regulador and the association of cooperatives AECOVI by the CNC (Comision Nacional de Competencia – roughly our Office of Fair Trading) for agreeing grape prices, some of which were initiatives from the Andalucian Ministry of Agriculture as part of the Strategic Plan 2002-2006.

The Court took into account that the pricing agreement was done in good faith under government scrutiny and was intended to address the oversupply problems in the Sherry zone.  Other organisations in the trade are now expecting their fines to be quashed. The growers are delighted, as the fine would be almost impossible to pay given the current hard times.

The grape pricing fines were the third measure initiated by the CNC. They had previously imposed fines on the trade of a total of 8 million euros. The first of these was for discriminatory sales quotas, for which the Consejo was fined 400,000 euros, which the Court reduced to 100,000. The second imposed fines of a total of 7 million euros on Fedejerez (the association of Bodegas), the Consejo and various individual bodegas. This is still awaiting resolution at the Court.

(Diario de Jerez)

Garvey back to profit

After 18 months in administration and drastic staff cuts the old-established firm is almost back on its feet. There are now only 53 staff, and those on reduced salaries, but nobody talks about Ruiz Mateos, their eyes are focused on the future. The worst may be over, but there is a lot to be done, not least on the financial side and the administrators are trying to avoid bankruptcy. Since the owner Back in Business was relieved of management of the firm, it it is verging on profit after taxes and suppliers were paid.

Things are difficult, but the bodega has never stopped working and has sufficient stocks to supply demand. Prices have had to rise and a few clients have thus been lost, but some have returned. The firm is actively seeking new customers and is abandoning the cheap and unprofitable BOB (Buyer’s Own Brand) Sherries. Confidence in Garvey is gradually returning, both from suppliers and clients, and it seems that the bodega will be able to stand on its own two feet without depending on being part of a group. The staff are motivated and kept informed of any movement in the administration. It is possible that Garvey might merge with Zoilo Ruiz Mateos, also in administration.

(Diario de Jerez)

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