By James Atkinson
Independent Liquor Group (ILG) has successfully transitioned into a new partnership with logistics company Toll that will more effectively realise the potential of its Sydney warehouse, the distributor says.
ILG made the decision to build and finance the 15,500 square metre Erskine Park warehouse about four years ago, but has only been using less than half the available space since it opened.
CEO Doug Evans recently announced to members that after long negotiations, Toll had agreed to take a head lease on the entire facility that includes leasing the empty space, and they will also be managing ILG's warehouse operations.
"ILG and its shareholders continue as the owners and the landlord and we will be staying at Erskine Park in the office as will our wholesaling operation," he said.
Evans said that while it is a state of the art facility, a combination of factors including regulatory changes such as the RTD tax and the impact of the economic downturn had slowed ILG's expected growth and the projected volume through its warehouse.
"The benefits of this deal are numerous; including rental income for the empty space in the warehouse, and improved efficiency and sophistication in our warehouse operations that a global business such as Toll can deliver," he said.
"Securing a long term blue chip tenant like Toll substantially increases the value of your warehouse and protects the co-operative's asset."
"Additionally should ILG expand or look at new markets or form an alliance in another location we can utilise the reach of TOLL and their numerous warehouse facilities throughout Australia," Evans said.
He said the distributor's transport operations will remain contracted to ILG and will continue to deliver to members as normal.
"This is a major change for ILG but it is a crucial decision to ensure continued viability and the ongoing importance of our co-operative in this highly competitive market, and provides a strong platform for future growth and success," he said.