Virgin looks at joint venture in finance services
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Your support makes all the difference.RICHARD Branson's Virgin Group is set to diversify into financial services in its drive to exploit the Virgin brand. The company is believed to be in the early stage of negotiations with potential partners with a view to forming a joint venture.
Virgin recently announced a series of joint ventures in consumer products, including vodka and personal computers. The company declined to comment on the issue, but industry sources say that Mr Branson is looking closely at opportunities in the financial marketplace.
On Monday, Virgin revealed plans to enter the fiercely competitive cola market through a 50-50 joint venture with Cott, the Canadian firm that makes cola for Sainsbury. The new Virgin Cola Company will be owned by Cott and the Virgin Trading Company, which has been set up to spearhead Virgin's move into the consumer goods sector.
Virgin said the cola would be widely available by the end of November but has refused to say where it will be sold. One analyst said that the success of the product will depend largely on the outlet and the audience. He remarked that, unlike own-brand cola drinks sold by supermarket chains, Virgin did not have a captive audience and anyone would struggle to win market away from the established brand names.
Yesterday Mr Branson said that consumers had been paying a high price for branded drinks such as Coca-Cola and Pepsi. He said Cott had already been instrumental in fighting these 'cola brand taxes' with a range of retailer labels and the new product under the Virgin name would prove a winner.
Coca-Cola said that the latest newcomer in the marketplace would give consumers another chance to demonstrate their preference by sticking with Coca-Cola. A spokesman said: 'We have faced competition throughout our history. Consumers consistently demonstrate, when given a free choice, that they prefer our product.'
Separately, Virgin will today formally launch its triple- distilled Virgin Vodka, which is a partnership with William Grant & Sons, the maker of Glenfiddich.
Under the agreement Virgin will receive royalty payments on sales of the vodka, although there is an option to turn the partnership into an equity joint venture. It is likely that any future agreements involving the Virgin name will also take the form of equity partnerships.
Virgin said that no one had yet tried to put a value on its name and it would be almost impossible to do so.
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