Conviviality released an RNS late yesterday effectively saying that it had failed to secure the necessary funding from institutional investors. This morning it has confirmed the appointment of administrators. Conviviality through its Matthew Clark and Bibbendum subsidiaries is the dominant on-trade supplier to the UK hospitality sector, serving around 23,000 outlets out of a market size of c.45,000. It was thus in the hospitality and drink manufacturers interest that Conviviality secured the necessary funding, both from a supply and competitive pricing perspective. The fact that it has not will have clear short term supply issues for both sectors. Given wider consumer and cost related challenges currently facing the sector and the significance of Easter trading this is clearly a negative of varying degrees for the quoted pubs & restaurant sector. Our understanding is that the majority, if not all, of the pubs and restaurant stocks have exposure to Conviviality in terms of drinks supplies. At a drinks manufacturer level, a cursory look down the products that Matthew Clark lists on its website would suggest the flowing soft drink companies also have a distribution relationship with the business – AG Barr (primarily the Funkin cocktail product), Britvic (J2O and various other brands) and Fevertree.
