Lifesavers miss out on cash from sunscreen sales after retailer's receivership

Surf Life Saving NZ is short in income this year following a company it collaborated with to sell its branded sun creams was liquidated. Photo / Jason Oxenham

One of the country's largest charities has missed out on over $40,000 in royalties from sun cream sales following retail chain Pricewise's receivership and change in ownership.

Surf Life Saving NZ (SLSNZ) had a licensing deal with Zenith Distribution - and previously BDM Grange, the import and distribution arm of personal care retailer Pricewise - which gave it a cut from the sale of SLSNZ-branded sunscreen products.

Pricewise Ltd and Zenith Distribution Ltd, which sold beauty and personal care products and together turned over about $12 million a year, were placed into receivership in August. This followed a dispute between then-director Andrew Berryman and major shareholder Colin Neal of Polar Capital over the way the business was run.

A month later the 16-store retail chain and its main supplier were sold to Polar Capital for $2.3m, before both businesses were transferred to a new entity and the previous ones placed into liquidation.

Surf Life Saving NZ relies on the goodwill of thousands of volunteers, fundraising, grants and sponsorship to keep New Zealand beaches patrolled.

Its licensing agreement with Zenith was the only one it held, and for around eight years it had received at least $40,000 annually through the partnership.

Forty thousands dollars plus GST was the minimum guaranteed payment SLSNZ had under the licensing agreement with Zenith Distribution Ltd.

SLSNZ chief executive Paul Dalton said the charity was disappointed to learn it would not receive royalties earned in the year to September as it was an unsecured creditor.

While SLSNZ generates a revenue of approximately $10 million each year through donations, the money it received from the agreement went into its general fund, paying for overheads and salaries, Dalton said.

"Our level of profitability is not at a level where $40,000 goes unnoticed - it is still a significant hit to the bottom line," Dalton told the Herald.

"I was gutted to be honest, and pretty disappointed about the way we found out - and the lack of communication from Zenith as to what was going on."

Surf Life Saving branded sun creams manufactured by Zenith have been canned following the change in ownership - a blow for the charity, chief executive Paul Dalton says. Photo / Supplied

Dalton said his team contacted the new entity and discovered the arrangement was over. He understood the new company had no obligations to honour the agreement it had held with Zenith.

There was no new deal with the new owner to manufacture SLSNZ-branded sun cream, Dalton said, but the charity was actively looking for a partner for next summer.

"It seems like a good opportunity for us to still be in that market but we're going to be cautious in terms of who we might choose to make it happen."

Liquidator Brenton Hunt of Insolvency Matters did not respond to the Herald's questions.

Paul Dalton, chief executive of Surf Life Saving New Zealand. Photo / Supplied

Berryman, who founded Pricewise and Zenith and spent about two years establishing the supply chain for the SLSNZ-branded sun cream, said he was disappointed to hear the licensing agreement for the manufacture and sale of the lotions had ended.

"It's a great brand and it's been good to help [SLSNZ] out over the years. I would've thought when the shareholder bought it out of receivership that they might have seen their way through to supporting [SLSNZ] in some manner," Berryman said.

The sun cream was made in Australia and was a top-seller, Berryman said.

Colin Neal of Polar Capital said he would look to make a small donation to Surf Life Saving NZ in a personal capacity for the inconvenience caused.

He said Pricewise had donated $18,000 worth of the product to Surf Life Saving NZ in October.