MacFarlane Group has strengthened its key packaging distribution division in a £4.8m cash deal to buy Allpoint Packaging, a London-based business with a strong supply line from China.

MacFarlane Group has strengthened its key packaging distribution division in a £4.8m cash deal to buy Allpoint Packaging, a London-based business with a strong supply line from China.

Chief executive Peter Atkinson said the acquisition had been brewing for six to nine months, and he restated the group's confidence that it is not suffering any noticeable fall-out from the consumer slowdown.

Macfarlane's Scottish-based labels business supplies the big spirits brands and unbranded products too, while its packaging arm is benefiting from healthy internet shopping growth at the likes of play.com and Tesco.com. "The fact that these are our customers gives us some defence against the slowdown," Atkinson said.

He said that although there had been a major uplift in energy prices "the impression we get is that basic demand is beginning to slow down, and the appetite for raw material price increases is probably not as strong as it was previously".

Two-thirds of the cash price for Allpoint Packaging is up front, the rest dependent on trading targets being hit over the next 12 months. It will add some £7m to turnover, taking it to £110m and underlining Macfarlane's 20% market share in the UK sector.

Atkinson said: "Allpoint is a successful company and this acquisition demonstrates our continuing commitment to the strategy of developing our UK packaging distribution business. We are delighted that the Allpoint management team will remain with the business."

Based in Hayes, with other sites at Southall and Basingstoke, Allpoint is well situated for the M3-M4 corridor where Macfarlane was under-represented.

The shares were steady at 21.5p, just above their four-year low.