BWG to supply Gala for first time

BWG to supply Gala for first time

By Eamon Quinn

Wholesaler BWG which is best known as the supplier to Spar, Eurospar, Londis, and other independent stores in the Republic says it plans to buy rival 4 Aces Wholesale.

The Midlands supplier has contracts with a significant number of small retail outlets, including around 35 of the 220 Gala stores.

The deal will require the approval of the Competition and Consumer Protection Commission. It includes 4 Aces’ main 40,000sq ft warehouse in Portlaoise, Co Laois, and wholesale operations in Navan, Co Meath, and Clonmel, Co Tipperary.

The significance of the transaction is that BWG for the first time will become a supplier to some of the Gala wholesale network, covering stores in nine counties from Monaghan to Tipperary.

4 Aces, which is owned by Liam Linden and Pascal O’Brien, had sales of €57.5m in 2016 and employs 85 people. They will stay on with the business which will still trade under the 4 Aces and Better Deal names.

BWG said it wasn’t disclosing the purchase price. BWG, which operates from a 240,000sq ft national distribution centre in Clondalkin in west Dublin, which opened four years ago, and operates a number of other centres, said it plans to expand the 4 Aces business.

BWG supplies 400 Spar stores and 50 Eurospar outlets, as well as Mace, Londis, and XL stores. It employs 22,000 people in the Republic. The Spar wholesale business supplying 300 stores in the North is owned separately, by Henderson Wholesale.

BWG is 80% majority-owned by Spar Group Limited which is a South Africa-based wholesaler. Its shares are listed on the Johannesburg stockmarket. Spar Group Limited also has Spar retail contracts in Switzerland based in St Gallen, and in south-west England. Its shares have risen about 8% in the past year, valuing the wholesaler at over 38.76bn rand (€2.62bn).

Minority stakes in BWG, which has sales of around €1.4bn, are held by its group chief executive Leo Crawford; group finance director John O’Donnell, and group property director John Clohisey.

Spar Group Limited said in financial results last year that BWG had “weathered deflationary pressures with solid operating profit growth and market share gains across most of its retail brands”, including Spar, XL and, Londis. It said at the time that BWG had access to €60m in loans and overdraft facilities.

According to Kantar Worldpanel data, ‘convenience retail outlets’ such as Spar and Mace which compete with the big five supermarkets of Dunnes, SuperValu, Tesco, Aldi and Lidl control about 11.5% of the annual €10.5bn spent on groceries in the Republic.

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