42 Below and Charlie's mix it up in bars and cafes

Vodka-maker 42 Below has bought a 4.7 per cent stake in juice-maker Charlie's Group to boost its sales in licensed cafes in New Zealand and Australia.

Geoff Ross, chief executive of 42 Below, said the two companies had been discussing a possible distribution partnership for some time. It was Charlie's $10 million purchase of Phoenix Organics that prompted Ross to make a move.

Phoenix, with its organic juices and sparkling drinks, gives Charlie's access to a distribution channel that caters to more than 3500 cafes and high-end retail outlets in New Zealand and Australia.

"Rather than just do a distribution deal, we said let's take a small stake to make the synergies work," said Ross.

"We'll look at broadening their reach into bars and restaurants and, conversely, they'll look at broadening our reach into cafes."

Asked whether the two companies could merge, Ross said he could not rule it out completely.

Charlie's chief executive, Stefan Lepionka, said 42 Below's investment made sense because the two firms had much in common.

"The companies have many similarities - New Zealand-owned, high growth, offering premium brands," said Lepionka.

The juice-maker said next year would be a year of consolidation. It recently rebranded its juices, launched a new marketing campaign and a new line of fruit smoothies.

The vodka-maker bought Charlie's shares for $1.63 million in cash.