Whisky's
reputation 'under threat' A decision by drinks giant Diageo to change the composition
of the famous Cardhu malt has caused waves of protest around the world.
Diageo's
global brand director told BBC Scotland News Online that the implications
of the move had been distorted and over-dramatised.
However,
rival whisky maker William Grant & Sons, whose products include
Glenfiddich and The Balvenie, claims the industry's reputation is
being damaged.
Its
deputy group managing director tells us why... Click
here for full story Articles Courtesy of The Scotsman
European
probe launched into Diageo dispute THE row engulfing the Scotch whisky industry has intensified
even further, after it emerged that the European Commission is set
to investigate Diageo’s decision to turn its Cardhu single malt
into a blend of five different malts.
The EC will examine the matter after receiving a letter of objection
to Diageo’s move from European Parliament president Pat Cox.
It will investigate whether Diageo’s decision to alter its Cardhu
product without making noticeable changes to the whisky’s packaging
constitutes an infringement of internal market or consumer protection
regulations... Click
here for full story Articles Courtesy of The Scotsman
Tourist
drive brings malt out of mothballs WHISKY from a distillery once mothballed will go on sale
later this year as part of a plan to create a new tourist attraction
in rural Perthshire.
A few thousand cases of Tullibardine whisky will be placed on the
market over the next few months following a label and carton redesign
by Wolffe & Co, the Edinburgh consultancy.
Tullibardine distillery, near Gleneagles, was sold by the drinks group
Whyte & Mackay to a Scottish consortium earlier this year. Jim
Beam Brands, Whyte & Mackay’s predecessor, stopped production
at the site in 1994.
Doug Ross, one of Tullibardine’s directors, said sales of spirit
distilled in 1993 would increase gradually over the next 10 years.
It will be priced as a mid-market malt at around £23 a bottle.
Ross said: "Rather than have to find distributors, we plan to
sell it through upmarket outlets such as quality hotels."
£10m visitor centre will provide distillery tours, shops and
a restaurant
The new-look bottle should be in a limited number of shops and bars
by Christmas. Michael Beamish, another director, said the previous
packaging had looked "generic" and that the new label conveyed
more individuality. Whisky made this year has to be aged for 10 years
and so will not be available until 2013.
The company plans to produce about 100,000 litres a year, putting
it on a level with smaller distilleries such as Edradour, which is
also in Perthshire.
Customers will be able to pay up front for individual casks containing
the equivalent of about 360 bottles.
Ross estimated a few hundred casks would be sold, generating about
£160,000.
He said: "We have not been forced into doing this to survive.
It is to meet demand from the public and aficionados. If you view
[buying a cask] as an investment, it might not make sense, but people
like the idea."
In the meantime, Tullibardine plans to generate cash by building a
£10m tourism attraction and retail centre at the site, which
is close to the busy A9 Stirling-to-Perth road.
The 50,000sq ft centre will provide distillery tours and a related
exhibition, as well as a restaurant and retail centre including a
Baxters food shop.
It aims to attract 250,000 customers a year. Plans are in the process
of being drawn up by 442 Design, the Edinburgh agency.
Tullibardine is one of a number of small distilleries which have been
reopened or built from scratch over the past 10 years, including Ladybank
in Fife and Blackwood in Shetland.
The company is part of the industry majority which has criticised
drinks group Diageo’s plan to sell a mixture of malt whiskies
under the Cardhu brand name. Articles Courtesy of The Scotsman
Whiskies
galore The story of how an old neglected Islay distillery was
rescued and revived by a team of young private investors a couple
of years ago is now familiar to whisky lovers. The new owners of Bruichladdich
on the shores of Loch Indaal now call themselves the free spirits
and "enfant terribles" of the whisky world. I’d call
them today’s heroes; a high-spirited team of Davids fighting
against a world of corporate Goliaths. The latest rash of "Laddie"
bottlings are some of the best on the malt shelf today - ideal for
celebrating St Andrew’s Day tomorrow... Click
here for full story Articles Courtesy of The Scotsman
Pure
malt row sees Diageo frozen out WHEN Diageo sits down next week with members of the Scotch
Whisky Association (SWA) to defend its decision to brand Cardhu as
a "pure" rather than "single" malt, it will find
itself completely isolated.
The Scotsman has learned that the executive of the SWA has told Diageo
that it feels the only solution to the present crisis is for the world’s
biggest drinks company to withdraw its controversial Cardhu Pure Malt
product.
The Scotch whisky industry has been angered by Diageo’s decision
to sell the whisky in the same style of bottle and with the name of
its Speyside distillery on the label. Distillers claim the decision
could damage the industry and confuse drinkers into thinking Cardhu
was still a single malt, rather than a blend... Click
here for full story Articles Courtesy of The Scotsman
Whisky
market The whisky industry spends around £90 million a
year with Scottish cereal suppliers, and uses about half of all the
cereals grown in Scotland. The suggestion by ET Baxter (Letters, 22
November) that distillers have "halved the price they pay"
for barley ignores the reality of movements in world prices, and the
fact that growers’ contracts are generally with malting companies,
not distillers.
The suggestion that a higher price paid by distillers for barley would
cost the industry just a few pence a bottle ignores the highly competitive
nature of the international drinks market in which whisky operates,
and the fact that the majority of the retail price is tax, not money
going to distillers.
Many distillers already buy all their barley from Scottish sources,
and often do so while paying a premium to ensure continuity of supply
under branded contracts. But, given the vagaries of the weather it
is unrealistic to suggest that all barley used by the industry must
be grown in Scotland.
The brandy industry’s reliance on French grapes in the late 1800s
led to its demise when the crop failed, allowing whisky to flourish
and become the global industry it is today.
No-one with the best interests of Scotland’s economy at heart
will place the future of Scotland’s leading indigenous industry
at the mercy of the Scottish climate.
CAMPBELL EVANS
Scotch Whisky Association
Atholl Crescent
Edinburgh Article Courtesy of The Scotsman
Right
spirit of self-censorship ALLIED Domecq, the drinks company, has appointed advisers
to vet its ads for those which may link alcohol with sexual success,
or... irresponsible drinking.
The company, which owns brands including Ballantine’s whisky
and Harveys Bristol Cream, is believed to be taking the unusual step
to convince public health officials that the drinks industry does
not need external regulation. Wishing to prove how responsible it
is, Allied has even withdrawn an ad - which has never been shown -
for Wet By Beefeater, a cocktail version of Beefeater gin.
It showed a man and a woman at a piano with the slogan: "When
he looked at her like that she knew she would get wet."
What’s the world coming to? Article Courtesy of The Scotsman
No
barley will mean no whisky industry Until responsibility for the whisky industry is transferred
to Edinburgh, the Cardhu saga will remain a mar-ginal interest for
London politicians.
The rural development minister, Ross Finnie, is "consulting"
on the future of Scottish agriculture, but while Diageo is able to
treat malt whisky as a commodity and source the raw ingredients for
it from anywhere in the world, the future of Scottish agriculture
is not in our hands.
The few multinationals which own our distilling industry have halved
the price they pay for low nitrogen malting barley in the last seven
years. Prices are now below the cost of production, so without subsidy
there would be no malting barley grown in Scotland.
To pay farmers a price which did give them a return would cost only
pence per bottle. It, therefore, comes as no surprise that an industry
which treats its supply base with such disdain is as cavalier with
the reputation of its final product.
The organisation, Linking Environment and Farming, of which I am chairman,
promotes integrated farm management, a discipline for farmers which
shows the way. However, without a realistic price from the distillers
for our malting barley there will be no future for Scottish agriculture.
In time, Scotland will have no whisky industry either; no barley grown
in Scotland means it will be cheaper to make whisky elsewhere.
ET BAXTER
Gilston
nr Leven, Fife Article Courtesy of The Scotsman
£7,500
bid offer for trip to Macallan A Listener to one of radio's most popular breakfast shows
has paid £7,500 for an exclusive trip to the Macallan Distillery
on Speyside.
William Jones made the highest offer after an hour's frenzied bidding
during the BBC's Children In Need auction on yesterday's Wake Up With
Wogan programme.
It will see Mr Jones, from the Isle of Man, flown north along with
a friend and treated to a VIP tour of the distillery near Craigellachie.
They will be given access to the Macallan's unique £14.5million
Fine and Rare range of vintage malt whiskies which is normally kept
well under lock and key. The most expensive bottle in the range is
worth £20,000.
Mr Jones and his guest will stay at the Craigellachie Hotel and they
will be served lunch or dinner in the dining-room at Easter Elchies
House, the distillery's spiritual home overlooking the River Spey.
They will also be given a tutored nosing and tasting by Bob Dalgarno,
the Macallan's whisky maker. Carol McLaren, of the Macallan team which
arranged the auction prize, said staff at the distillery were delighted
with the amount the Macallan trip had raised for Children In Need.
"The distillery team pride themselves in the warm welcome they
give all our visitors to ensure that each and every guest enjoys the
uniquely exclusive atmosphere at the Macallan," she said.
"But the winners of today's auction prize can be sure that absolutely
all the stops will be pulled out for their visit.
"They will enjoy the truly unforgettable malt whisky experience
of a lifetime." Article Courtesy of The Press & Journal
Glenmorangie
sees malt sales rise 10% GLENMORANGIE continued its march on the growing malt whisky
market yesterday after reporting an 8 per cent increase in half-year
profits on the back of growth of 10 per cent in its flagship brand.
Chief executive Paul Neep said the group continues to make good progress
against all strategic objectives and emphasised that developing and
building premium brands for the long term remains the firm’s
key objective.
Focusing on the Far East, Neep said that in real terms the percentage
of Glenmorangie’s business in Asia was relatively small, but
he was looking to grow that in the next decade.
Neep said: "There are some interesting markets for malt in the
Far East, particularly in Korea and Taiwan, and we are looking at
their potential."
The company said shipments of its Glenmorangie malts rose 10 per cent,
while its Glen Moray brand was ahead 8 per cent, spurred by the "Glen
of Tranquility" advertising campaign that will continue over
Christmas.
Overseas sales were strongest in the US with Glenmorangie outperforming
rivals, while sales in Canada doubled.
The alliance with Bacardi-Martini brought instant rewards in the UK
with its marketing strengths enabling Glenmorangie to capture market
share from competitors.
It also gave it a distribution platform in Germany, Spain, the Netherlands,
Austria and Switzerland.
The company began bottling the new cream spirit brand Drambuie Sylk
in July and this has been introduced to the US market. Neep said the
tie-in with Drambuie was a "win-win" for both parties, but
he ruled out the possibility of a takeover.
"It is a private company, it is not for sale and we have never
shown an interest in buying it."
Neep added that an expansion at its Glenmorangie distillery had lifted
output, while its Ardbeg distillery on Islay is currently operating
at more than 90 per cent capacity. Glenmorangie has three distilleries,
in Tain, Elgin and Islay, and employs 295 full-time staff.
The Ardbeg brand has entered the top ten malts in the off-trade sector,
but Neep warned that heady sales growth of 20-30 per cent would soon
slow due to limited stocks inherited in 1997 with the distillery,
which was mothballed during the 1980s.
He also cautioned that a sustained recovery of world economies continued
to be uncertain, and he anticipated the medium term environment towards
higher UK interest rates could affect consumer spending in the home
market.
Drinks analyst Fulton Patterson at Seymour Pierce said that there
was great potential in the next few years as the benefits of the Brown-Forman
and Bacardi tie-ups was just starting to come through.
Patterson said: "I think they are a well-managed business now,
the new guys in charge are showing their mettle.
"Christmas is absolutely vital for them of course. They are now
number one in the UK having overtaken Glenfiddich, gearing has come
down again.
"The Far East is starting to move quite nicely, all these things
are quite promising. I think they will carry on growing and go from
strength to strength."
The dividend was increased by 7 per cent to 4.5p per A ordinary share
(which carry limited voting rights) and 2.25p per B ordinary share,
reflecting continued confidence in the groups prospects. Article Courtesy of The Scotsman
Distillers
meet to talk over diageo issue The Scotch whisky industry has backed down on threats
to sue drinks giant Diageo for labelling Cardhu a "pure malt"
after changing the contents.
But senior directors of the major distillers still plan to pursue
the matter with the Scotch Whisky Association (SWA).
About 60 distillers met in Glasgow yesterday to discuss what action
they should take against Diageo for changing Cardhu from a single
malt to a blend of malts from different distilleries.
It is understood the vast majority of single-malt distillers were
represented, including Allied Domecq, Chivas Brothers, William Grant
& Sons, Morrison Bowmore and John Dewar and Sons.
Diageo, which owns such brands as Guinness, Smirnoff and Baileys,
changed the recipe of Cardhu because of a shortage of single-malt
whisky to supply the profitable Spanish market.
The industry believes changing the wording on the label from "single
malt" to "pure malt" will confuse customers and undermine
the prestigious and profitable single-malt market.
Senior directors from the main whisky companies wrote to Diageo and
the SWA yesterday about the marketing of Cardhu.
Their message was that the industry cannot compromise on the protection
of single-malt whisky and Diageo should reconsider using the name
Cardhu - which has been a single malt for 30 years - for a mixture
of malt whiskies.
A spokesman for the group said: "We are confident that sense
will prevail."
Diageo's president for Europe, Ian Meakins, said he was pleased the
other companies had agreed to pursue the matter with the SWA.
"As previously stated, we have at all times sought to resolve
the issue with the rest of the industry through the SWA," he
said.
"'We remain committed to the long-term future of the SWA as the
best forum for continuing this debate and seeking to develop a common
and coherent voice for Scotch whisky.
"Diageo's commitment to Scotch whisky is absolute. We want the
Scotch whisky category to grow and expand. We recognise that innovating
in an industry renowned for tradition over modernity has provoked
animated discussion."
SNP MEP Ian Hudghton has stepped into the fray on the side of the
disgruntled distillers.
He has approached the European Commission to see if the term single
malt could be recognised and protected under the EU's Agriculture
Quality Policy. Article Courtesy of The Press & Journal
Distillers
single-minded over malt THE Scotch whisky industry last night united against Diageo
over its decision to relaunch Cardhu as a "pure malt".
At a crunch meeting behind closed doors at the Glasgow offices of
Morrison Bowmore, senior executives from all of the major distillers
rallied behind the industry’s representative body, the Scotch
Whisky Association (SWA) , saying it still had a "significant
role to play" in the resolution of the issue.
It is understood that, after a "gentlemen’s agreement",
it was decided that a statement will not be issued until Glenmorangie
reports its interim results to the City at 8 am today.
But last night a source close to the meeting said it had resulted
in a unanimous condemnation of Diageo’s actions. He said: "The
industry is very concerned about the Diageo move and we will be working
with the Scotch Whisky Association to resolve the issue."
It is believed the vast majority of single malt distillers were present
at the meeting, including executives from Allied Domecq, Chivas Brothers,
William Grant’s and John Dewar and Sons.
Diageo’s move to change the Cardhu bottle’s contents from
a single malt to a vatted malt from five distilleries without changing
its name has caused outrage in the industry.
On Thursday, a meeting between Diageo managers and Scottish MPs to
try to resolve the dispute ended inconclusively.
Diageo insists it will not back down, claiming the change at Cardhu
will boost the £20-a-bottle whisky's profile.
All eyes now turn to the SWA’s next meeting on 4 December where
industry leaders will meet Diageo to try to reach a compromise.
Last night, Diageo said that, ultimately, the issue had to be resolved
by the SWA.
After reaching the floor of the House of Commons last week, it was
the European parliament’s turn to discuss the issue when the
SNP MEP, Professor Neil MacCormick, asked the president of the European
parliament to write to Diageo’s chief executive.
Speaking in the opening session of the parliament’s plenary session
in Strasbourg, Prof MacCormick said that brand owners should not mislead
the public by abuse of a well-known name.
Prof MacCormick said: "Just as we should be concerned when counterfeiters
abuse rightholders, so we should be alert when rightholders abuse
consumer confidence.
"Diageo, the global spirits producer, has lately done this very
thing. It is not the single product of a single distillery. Consumers
are being misled, and the good name of Scotch whisky is being put
at risk."
Last week Angus Robertson, the Scottish National Party MP, called
on the Prime Minister to support cross-party efforts to force Diageo
into a U-turn. He told the House of Commons that Diageo was "undermining
the standing of this important industry".
A wary Tony Blair told the Commons: "I will look into this issue.
I am not entirely sure this is a matter for government. At least,
I sincerely hope it’s not a matter for government." Articles Courtesy of The Scotsman
Fiddlers'
whisky gig in Frankfurt It's a long way to go for a Saturday night gig, but the
14 teenage fiddlers flying to Frankfurt this weekend to play at a
European whisky festival are not complaining.
Moray musical group Strathspey Fiddlers have been invited to perform
at mainland Europe's biggest whisky festival.
A combination trade fair and festival of whisky culture, InterWhisky
2003 features three days of talks and tastings of whiskies from Scotland,
Ireland, Canada and in the USA.
Whisky is big business in Germany, with German retail stores selling
approximately 12million bottles of Scotch whisky last year, and about
300 people are expected to attend the weekend festival.
The event will culminate in a Scottish dinner in the Inter-Continental
Hotel, with entertainment provided by the Strathspey Fiddlers.
The performance will not be limited to fiddling, according to group
leader Donald Barr. The teenagers from Huntly, Keith and Buckie will
also provide piping, dancing and singing.
He said: "Performing for 300 people from all over Europe is going
to be great fun." The fiddlers will leave Scotland early on Saturday
morning and return the next day.
During their brief visit, the group will be treated in style, staying
overnight at the five-star hotel where the dinner is taking place.
Several area distilleries will be represented at the festival, including
Glenfiddich, Glenlivet, Glenrothes and Strathisla. Article Courtesy of The Press & Journal
Water
of life's secrets sold off IT HAS been Scotland’s number one indigenous export
since Friar John Cor first appeared in the Exchequer Rolls with eight
bolls of malt in 1494. But now the £2 billion whisky industry
is not only exporting the water of life but also the means and materials
to make it... Click
here for full story Articles Courtesy of The Scotsman
Diageo
chief's £50,000 shares windfall DIAGEO, the drinks giant, launched an offensive yesterday
to rebuff accusations that it was forced to blend its single malt
brand Cardhu because it had misjudged stock levels.
In an interview with The Scotsman, Jonathan Driver, the company’s
global malt whisky director, said it was a strategic move aimed at
building on the success Cardhu had enjoyed in Spain.
Mr Driver said: "We are not short of Cardhu, but we have reached
capacity. The issue here, and the vocabulary is very important, is
strategic. Shortage is not the issue. I repeat, we are not short of
Cardhu."
However, the issue has put the world’s largest drinks group at
odds with the rest of the whisky industry.
Yesterday, the row took another turn when an SNP MP, Angus Robertson,
warned Tony Blair that Diageo’s decision to change a brand of
single malt to a blend risked "undermining the standing"
of the industry.
Mr Blair said he was not sure it was a matter for government, adding:
"At least I sincerely hope that it’s not a matter for government."
Critics were angered when the company announced plans to sell the
whisky in the same style of bottle and with the name of its Speyside
distillery on the label.
They claimed the decision could both damage the industry and confuse
drinkers into thinking Cardhu was still a single malt, rather than
a blend. Article Courtesy of The Scotsman
Distiller's
sales jump WHYTE & Mackay, the privately-owned whisky distiller
formerly known as Kyndal, has reaped the benefits of a push into England
and Wales following a jump in sales for the four months to the end
of August.
The company sold 20,000 cases south of the Border - worth a total
of £2.4 million - during the period compared with just 3500
cases, for £447,000, last year.
Whyte & Mackay said a distribution deal with the UK’s top
five supermarkets had fuelled the rise. Articles Courtesy of The Scotsman
McConnell
and MPs intervene in industry rift over single malt It followed a second meeting between the all-party Commons
scotch whisky group and Diageo directors in an attempt to heal a serious
rift in the industry between those anxious to preserve the integrity
of "single" malt brands and the decision of Diageo to replace
its former single malt Cardhu with a blend of malts, calling it "pure
malt"... Click
here for full story Article Courtesy of ThePress & Journal
Domecq
chiefs gain 38% bonus increases ALLIED DOMECQ, the wines and spirits group, increased
the performancerelated bonuses of three of its top executives by more
than 38 per cent in its past financial year, even though the company’s
share price fell by 7 per cent during the same period.
The world’s second biggest drinks company paid Philip Bowman,
chief executive, a performance-related bonus of £1.04 million
for the year to August 31, a 40 per cent rise on the year before.
Graham Hetherington, chief financial officer, received a £507,000
bonus, up from £366,000 last time. Meanwhile, David Scotland,
president of the wine division, received a 63 per cent increase in
his bonus, bringing it to £542,000 for the year.
The company defended the bonuses, saying they were “commensurate
with the much more demanding economic conditions in many of the relevant
markets”.
In October the maker of Ballantine Scotch whisky and Beefeater gin
reported a 3 per cent rise in full-year pre-tax profits to £480
million. The company said it was the worst market since 1999, as the
war in Iraq and the outbreak of severe acute respiratory syndrome
(Sars) hit demand.
A company spokesman said: “It’s true that our headline earnings
per share figure rose by only 3 per cent — but we were hit by
the decline in the value of the dollar and an increase in pension
payments. When these exceptional items are stripped away we increased
underlying profits by 20 per cent.”. Article Courtesy of The Times
Distiller
defends Cardhu blend DIAGEO, the drinks giant, launched an offensive yesterday
to rebuff accusations that it was forced to blend its single malt
brand Cardhu because it had misjudged stock levels.
In an interview with The Scotsman, Jonathan Driver, the company’s
global malt whisky director, said it was a strategic move aimed at
building on the success Cardhu had enjoyed in Spain.
Mr Driver said: "We are not short of Cardhu, but we have reached
capacity. The issue here, and the vocabulary is very important, is
strategic. Shortage is not the issue. I repeat, we are not short of
Cardhu."
However, the issue has put the world’s largest drinks group at
odds with the rest of the whisky industry.
Yesterday, the row took another turn when an SNP MP, Angus Robertson,
warned Tony Blair that Diageo’s decision to change a brand of
single malt to a blend risked "undermining the standing"
of the industry.
Mr Blair said he was not sure it was a matter for government, adding:
"At least I sincerely hope that it’s not a matter for government."
Critics were angered when the company announced plans to sell the
whisky in the same style of bottle and with the name of its Speyside
distillery on the label.
They claimed the decision could both damage the industry and confuse
drinkers into thinking Cardhu was still a single malt, rather than
a blend. Article Courtesy of The Scotsman
Rebirth
of one of Scotland's oldest whiskies TULLIBARDINE, one of Scotland’s oldest distilleries,
will re-open for business at the end of the month almost ten years
after it was closed down.
The distillery, in Blackford just south of Gleneagles in Perthshire,
will distill a limited production of Tullibardine Single Malt.
Doug Ross, a director of Tullibardine, the consortium which bought
the site for £10 million in June, described the reopening as
the culmination of a long-term dream.
Mr Ross said: "We have spent a significant sum in restoring the
distillery. When we acquired it from Whyte and Mackay in the summer
it was in a state that had been sympathetically de-commissioned. All
the kit was in good condition but since then we have fitted and upgraded
the pumps, valves, pipes and made them more efficient."
Described by Michael Jackson, author of the Malt Whisky Companion,
as "eminently quaffable", the whisky has a soft, sweetish,
lemony style with a vanilla like spiciness.
Customers will be offered the chance to buy a personalised cask which
will be kept in a warehouse for a period of ten years. The casks,
on the market at £800, can be labelled, bottled and distributed
to the owner’s specifications.
The original distillery dates back to the late 1790s. Home to Highland
Spring, Blackford also boasts the site of one the oldest breweries
in the UK, dating back to 1488 when it produced a special ale for
the coronation of King James IV at Scone.
In the 1970s, Tullibardine was taken over by Invergordon before being
mothballed in 1994.
David Williamson, of the Scotch Whisky Association, said: "There
has been an encouraging trend of whisky distilleries being reopened
and redeveloped and this is good news for the industry." Article Courtesy of The Scotsman
Whisky
galore not for Iain IAIN Banks’s latest oeuvre, Raw Spirit is primarily
about whisky but also "an idiosyncratic journal which is part
travel book".
The publishers insisted that Banks, "a bit of a petrol head",
should drive round the distilleries. But isn’t it funny how whenever
publishers commission a Scottish writer to do a book on whisky, they
make sure they do it on wheels? Obviously, they do not trust them
otherwise to stay sober. Our old mucker on the Diary, Tom Morton,
had to do his on a motorbike with sidecar.
Meantime, Banks usually enjoys a dram at his local, the Albert Hotel
in North Queensferry, where he was featured in the foodie section
of a Sunday magazine this weekend. The Albert’s hostess, Rhona
Campbell, was saying, though, that he is not the only famous customer:
"Gordon Brown has a house in the village, so he pops in for drinks.
Tony Blair used to come with Mr Brown, but he hasn’t been in
since Labour has been in power."
Now, there’s a surprise. But where better to build bridges than
on the Forth? The Albert can replace Granita - or even Montpeliers
- as the scene of Labour’s new deal. Articles Courtesy of The Scotsman
Distillers
in singular threat to Diageo dram A Row at the heart of the whisky industry is threatening
to spill over into the courts.
It comes after industry giant Diageo provoked anger among rival distillers
by attempting to pass off a blend of whiskies as a prestigious single
malt.
Now a group of distillers have come together to explore the possibility
of legal action against Diageo. They say the move could clearly establish
a legally binding definition of single malt and benefit the industry.
Representatives from about 60 brands are due to meet in Glasgow a
week tomorrow. A civil action of consumer deception against Diageo
has already been mooted.
The row flared up after Diageo changed the recipe of one of Speyside's
most popular malts, Cardhu. Instead of being a traditional single
12-year-old malt, it is now being made from vatted malt from several
distilleries, although it is still being sold as Cardhu.
The only change Diageo has made to the label is to substitute the
word "single" with "pure".
Rivals claim that the move will mislead customers and could seriously
damage the worldwide reputation of the Scotch whisky industry.
Diageo, which accounts for about half of Scotland's whisky distilling,
said it announced changes to Cardhu in July after stocks of the single
malt ran low and led to fears they may not be able to meet increasing
demand. It is mainly marketing the "pure" malt in Spain
at the moment, then will move into Portugal, France, Italy and Greece.
It should be available in the UK in about a year.
Diageo says it has carried out publicity, advertising, tasting and
consumer education, particularly in Spain to ensure consumers are
aware of the change.
Scottish Whisky Association spokesman David Williamson said: "The
Scottish Whisky Association is very much involved in discussions about
changes to protect and allay the concerns expressed by some member
companies.
"We will have discussions with Diageo about the matter to find
a way ahead in the best interests of the whole industry."
John Grant, managing director of J & G Grant of Speyside, which
makes Glenfarclas, said: "They are misleading the public by selling
Cardhu in the same bottle, with the same packaging it has had for
years, when what's in the bottle is not Cardhu.
"In my opinion, it sets a dangerous precedent." Article Courtesy of ThePress & Journal
Diageo
hits back in whisky wars DIAGEO, the Scotch whisky producer at the centre of an
increasingly bitter row over a new, vatted version of its 12-year
old Cardhu malt, has hit back at claims that its controversial changes
will harm the industry and predicted others would follow in order
to grow their exports.
Jonathan Driver, Diageo’s global malt whisky director, last night
defended his decision to turn Cardhu single malt into a pure malt
- a mixture of five whiskies from various Speyside distilleries -
to keep up with demand.
He said rival distillers should welcome his innovation as a way of
staving off competition from other spirits categories such as vodka
and rum.
He told Scotland on Sunday: "If this is successful, others will
follow. That doesn’t mean the end of single malts - it means
it is a better and bigger malts category at the end of it all. I genuinely
believe innovation is required to take the malt whisky business to
the next level."
Diageo is already distributing the Cardhu pure malt in Spain, France,
Portugal and Greece after runaway success grew sales by 200,000 cases
in little over a decade.
It is also testing the concept in the US, despite the new product
isolating Diageo from the rest of the Scotch whisky industry at home.
Others are concerned the move will tarnish the reputation of the industry,
which had exports worth £2.28bn last year.
But Driver’s comments were described last night as "wishful
thinking" by Tony Hunt, deputy managing director of William Grant
& Sons, which is leading the opposition.
Hunt accused Diageo of capitalising on the ignorance of Spanish consumers
- the biggest drinkers of Cardhu. "The reason why single malt
as a category has become the jewel in the crown as far as the Scotch
whisky industry is concerned is because we haven’t taken shortcuts,"
he said.
But Driver said he was ready for the controversy that would meet the
launch of the pure malt that it first dreamt up two years ago.
He revealed that limited inventory and growing popularity of single
malts had been a looming "crisis point" for Diageo since
the company was created in 1997 from the merger of Guinness and GrandMet.
It has been selling its Lagavulin single malt at capacity for the
past four years. Oban, which sells 64,000 cases a year, has since
followed suit, and Dalwhinnie is not far behind in hitting the ceiling
of supply.
But Driver rejected the idea that the pure malt concept could be spread
to the rest of his portfolio. He said: "Our Lagavulin consumers
would have simply rejected the whole proposition."
However, he argues that Cardhu, which has become the fastest-growing
malt whisky in the world, is another matter.
"To a Cardhu consumer, to say it comes from a small valley on
Speyside is just a little bit too much information when there is so
much else that people adore about it," he said, predicting others
would follow suit to grow their brands globally.
Driver will appear before the all-party Scotch Whisky Industry group
again this Thursday. Article Courtesy of The Scotsman
MPs
take shot at resolving Cardhu crisis SENIOR Westminster MPs are trying to end the dispute over
plans to change the make-up of one of Scotland’s top malt whiskies.
Diageo, which has its Scots HQ in Edinburgh, wants to end the production
of Cardhu single malt and instead produce a blend of different malts.
They want to label this as "pure malt’’, claiming that
existing stocks of the original product are running low.
But small single malt producers are outraged at this potential dilution
of their major selling point. Some rival producers - including John
Grant, who produce Glenfarclas - are threatening legal action.
William Grant and Glenfiddich are also outraged. They have warned
of major sales slumps in the key United States and Japanese markets
if the change goes ahead.
The meeting was hosted by Angus Robertson, Scottish Nationalist MP
for Moray - home to 50 per cent of Scotland’s distilleries including
Cardhu, and included Treasury Select Committee chairman John McFall,
who represents Dumbarton.
Following the meeting Diageo has committed itself to talks to try
to resolve the dispute, saying it would discuss "concrete solutions".
Over recent weeks the bitter dispute has divided the whisky industry,
which has seen threats of legal action and a possible split in the
industry body the Scotch Whisky Association.
Speaking after the meeting Mr Robertson MP, who is vice-chairman of
the All-Party Scotch Whisky Industry group, said: "This is a
positive development and we sincerely hope that realistic proposals
will be made next week by Diageo to help end this damaging crisis." Articles Courtesy of The Scotsman
CL
distillers chief quits THE chief executive of East Kilbride-based distillers
CL World Brands has unexpectedly quit following an announcement that
the chairman of its Trinidadian parent firm wanted to be more hands-on
in the day-to-day running of the business.
Ian Bankier’s departure will raise questions over the future
base of the company, formed last year.
Arnaud de Trabuc, executive director of strategic affairs for CL World
Brands, insisted the company would continue to be headquartered out
of East Kilbride.
CL World Brands distills the Bunnahabhain and Black Bottle whisky
brands and was formed last year through the acquisition of the Burn
Stewart distillery by Trinidad and Tobago conglomerate CL Financial. Articles Courtesy of The Scotsman
Edrington
moves to reshuffle board IAN Curle, the chief executive-in-waiting of the Edrington
Group, the maker of the Famous Grouse and The Macallan whiskies, moved
yesterday to strengthen his board with the appointment of two new
executive directors and a restructuring of the business.
Graham Hutcheon, previously distillation director, based at The Macallan
Distillery on Speyside, succeeds Curle as group operations director,
while Bill Farrar, who masterminded The Famous Grouse’s quirky
TV adverts, is promoted to group sales and marketing director.
Barrie Jackson, a main board director for the last nine years, is
promoted from sales and marketing director to a new role as group
strategy director and will concentrate on directing the group’s
future strategy.
Curle, 42, who was appointed deputy chief executive in May, succeeds
Ian Good as chief executive next April to become the youngest chief
executive in Edrington’s 150-year history.
Curle said he hoped the moves would strengthen the business, which
has doubled in size in the last four years, and will put it in good
shape for the tough challenges that lie ahead in the international
marketplace.
Earlier this year, Edrington sold its Bunnahabhain and Glengoyne distilleries
to Burn Stewart Distillers and Ian Macleod respectively, in deals
analysts said were worth more than £20 million.
The move was part of a strategic change in the company to focus on
its four main brands, The Famous Grouse, The Macallan, Highland Park
and Cutty Sark.
In July the firm reported a 24.6 per cent increase in pre-tax profits
to a record £61.7m while turnover rose 14.9 per cent to £230.7m. Articles Courtesy of The Scotsman
Scotch
on the rocks over Diageo THE Scotch Whisky Association has been thrown into chaos
over an unprecedented split between Diageo, Scotland’s largest
whisky producer, and the rest of the industry.
Members of the SWA, the industry’s trade body, will put intense
pressure on Diageo to reconsider its decision to axe its Cardhu single
malt brand when its governing council meets next month... Click
here for full story Articles Courtesy of The Scotsman
Allied
Domecq denies SWA pull-out threat ALLIED Domecq denied last night that it was on the verge
of quitting the Scotch Whisky Association (SWA) in protest against
the inaction over Diageo’s decision to turn its Cardhu single
malt Scotch whisky into a vatted malt. A spokesman for Allied said
there was "no truth in the rumour whatsoever", but added
that Allied are "extremely concerned about this issue and the
reputation of single malt".
The row erupted after it emerged that Diageo has substituted the contents
of its 12-year-old Cardhu single malt, taken from one source, with
a vatted malt, blended from a number of Speyside distilleries. It
is a move that many believe will damage the integrity and authenticity
of every category of whisky produced in Scotland. A spokesman for
the SWA said it was discussing the change with Diageo. Articles Courtesy of The Scotsman
Festival
aims to boost autumn tourism levels ABOUT 140 events are planned in the ten-day Borders Banquet
festival, including cookery demonstrations, murder mystery dinners,
wine and whisky tastings and art evenings.
Funded by Scottish Enterprise Borders, it is designed to boost tourism
at a traditionally quiet time of the year, said Alan Elliot, tourism
business manager at SEB.
Last year it brought in an estimated £150,000, up 29 per cent
on the event’s inaugural year.
Elliot said: "Official figures show that 25 per cent of all tourism
spend is on food and drink.
Last year we saw a large increase both in average food and drink sales
and in the number of bed nights sold as people use the event as a
reason to come to the region for a short break." Articles Courtesy of The Scotsman
Whisky
firm falls into red MORRISON Bowmore, the whisky distiller, has fallen into
the red because of costs associated with a distribution venture in
Uruguay.
The Sociedad Anonima joint venture with the Uruguayan government cost
Bowmore £700,000 in 2002, and the company has now exited the
business.
The venture, along with a move away from sales of cheaper bulk blended
whisky, saw Bowmore post a loss of £1.1 million for the year,
compared with a profit of £948,000 in 2001. Articles Courtesy of The Scotsman
Bottling
plant is pretty dram fast SCOTLAND’S fastest whisky bottling plant, capable
of producing 600 bottles every minute, has been officially opened
by the Edrington Group.
The maker of brands such as Famous Grouse and the Macallan has invested
£3 million in the high-speed bottling plant at its Glasgow premises.
The construction of the new plant on Great Western Road saved 50 jobs
at the 150-year-old company and is aimed at ensuring the £800m
Scottish industry continues to grow.
First Minister Jack McConnell, who officially opened the plant, said:
"Scotland’s whisky industry is one of the most important
elements of our economy, and its global reputation is stronger than
ever.
"Its success plays a strong part in attracting visitors to Scotland
and one in 50 Scottish jobs depend on this most famous of industries." Articles Courtesy of The Scotsman
William
Grant in good spirits as company set to grow FAMILY-owned distiller William Grant is looking to acquire
premium spirit brands after posting a 31% rise in pre-tax profits.
The Glenfiddich distiller wants to boost its portfolio, which ranges
from Glenfiddich malt whisky to OVD rum.
A spokesman said: "We are looking for acquisition opportunities.
We are a premium spirits business and it makes sense to continue to
do that."
He refused to identify which brands were under consideration, but
the company’s product range is underweight in brandy.
Grant’s, which has offices in Bellshill, London and Dufftown
in Moray, has considerable firepower at its disposal.
At the end of last year the company held £25.9m in cash, up
£8m on the previous year.
That increase came despite an £11.2m spending spree which brought
Gibson’s Finest Canadian whisky, Polstar vodka and three rum
brands into the group. Last year’s acquisitions, along with rising
sales of William Grant’s blended whisky, contributed to a 10%
rise in turnover to £323m in 2002. Pre-tax profits increased
by 31% to £60.8m.
The spokesman said sales of the blend had benefited from customer
loyalty and a strong marketing campaign.
Grant’s benefited from its stake in the Famous Grouse and Macallan
whiskies, which it shares with rival distiller Edrington. Articles Courtesy of The Scotsman
Whisky
giant's 'threat' to pure single malts NO-ONE can accuse Peter Smith of lacking fighting spirit.
"Everyone talks about the whisky industry being fuddy-duddy and
not going anywhere, but we as a company are not like that. We have
made changes that we think will benefit everyone in the end, and if
other people don’t like it, tough. What’s important is that
our customers do... Click
here for full story Articles Courtesy of The Scotsman
Double
Award for Bruichladdich in the USA In a unique double, Bruichladdich has been awarded the
title of Distillery of the Year for the second time in three years
and Import Malt of the Year for their Vintage 1970 by Malt Advocate,
the leading spirits magazine in the USA. The award was announced on
Tuesday 21 October at WhiskyFest in New York.
Mark Reynier, Managing Director was delighted with the news, ‘It’s
extremely gratifying to be recognised for our innovative approach
to making whisky as natural and authentic as possible and validates
the major decision we made this year to bottle Bruichladdich at the
Distillery.’
Andrew Gray, Sales Director, agreed, saying ‘I’m sure that
the quality, depth and breadth of range we have produced in such a
short time contributed to the decision to make us Distillery of the
Year. It’s amazing to have won this very prestigious title twice,
particularly since we’ve only been in operation since 2001.’
Jim McEwan, Master Distiller, who received the awards, commented ‘Winning
the title Malt of the Year is a testament to the skills of the guys
who made the whisky and the ones who looked after it whilst it was
maturing. I had the easy job. I found it, treated it gently - with
respect - and let it speak for itself.’
The award for the 1970 confirmed the five star rating already given
to this exceptional whisky by US Spirits writer Paul Pacult, who described
it as ‘supremely sophisticated and integrated… a complete
malt whisky experience’ . Articles Courtesy of Bruichladdich
Diageo
in good spirits DIAGEO, the world’s biggest wines and spirits company,
has told investors it is well positioned to achieve a "superior"
performance following last year’s drop in profits.
Updating shareholders at its annual meeting, chief executive Paul
Walsh said the company had demonstrated its ability to generate growth
even in challenging times as the global economy struggles to recover
from a major slump.
He said some markets were beginning to show signs of improvement,
particularly in the United States, which is now Diageo’s most
important market.
The group’s major brands include Johnnie Walker Black Label whisky,
Baileys cream liqueur, Smirnoff vodka and Guinness.
Mr Walsh said: "Continued share gains, even in difficult markets
such as those in Latin America, provide further evidence that Diageo
is well positioned to achieve superior performance.
"Therefore, while recognising that we are only three months into
the current financial year, we have not seen any trends emerging which
would lead us to change our view of Diageo’s future prospects."
Earlier this week, rival Allied Domecq - the world’s second-largest
drinks company - reported a three per cent rise in annual profits
and said the new financial year had started well, despite difficult
market conditions in Europe.
The owner of Ballantine’s whisky, Beefeater gin, Maker’s
Mark bourbon and Dunkin’ Donuts posted a pre-tax profit of £495
million for the 12 months to the end of August, up from £480m
for the previous year, on turnover two per cent higher at £3.4
billion. But Diageo’s annual results, announced last month, showed
a four per cent slide in underlying operating profits to £2bn
in the year to the end of June.
While the results were in line with market expectations, the group
said it took a £1.5bn hit from the disposal of the Burger King
fast food chain in December 2002, which it sold to focus on its spirits
division.
Burger King was sold to a group of venture capitalists - led by Texas
Pacific and including Bain Capital and Goldman Sachs Capital Partners
- for £947m after seeing a previous £1.5bn deal with the
same consortium fall through.
Annual turnover at Diageo, which employs 3000 north of the Border
under the leadership of Scotland director Allan Burns, rose three
per cent last year to just under £9bn.
Analysts believe the company - formed from the merger of drinks group
Guinness and food and spirits firm Grand Metropolitan in 1997 - is
lining up a £1.3bn sale of its 21 per cent stake in General
Mills, maker of Cheerios cereal and Yoplait yoghurt. Articles Courtesy of The Scotsman
Allied
sinks as results lose fizz SHARES in Allied Domecq, the world’s second biggest
drinks firm after Diageo, were the FTSE 100’s second biggest
faller yesterday after flattish annual results and a bleak statement
on trading in mainland Europe.
The market was taken aback that Allied’s volume growth in spirits
and wines, excluding acquisitions, slowed to just 1 per cent in the
year to end-August from 4 per cent at the half-year stage.
Philip Bowman, group chief executive, said: "The European economies
are difficult. We don’t see any light at the end of the tunnel."
Nigel Davies, a drinks specialist at investment bank JP Morgan, said:
"Growth in the second half has slowed considerably in turnover
terms and I think people are concerned about what that says about
future growth."
Analysts at Dresdner Kleinwort Wasserstein put their "add"
investment recommendation on Allied under review. Shares in the group,
which recently lost out in the bid battle for Peter Lehman Wines in
Australia to Switzerland’s Hess Group, closed down 16.75p, or
4 per cent, at 384.5p.
Allied, which unveiled a 3 per cent rise in underlying pre-tax profits
to £495 million, said that important mainland European markets
for the company, such as Germany, France and Italy, were still suffering
from severe trading conditions.
Allied’s best-known brands include Ballantine’s whisky and
Beefeater gin. Bottom-line pre-tax profits for the group, after exceptionals,
fell 15 per cent to £483m (£571m last time).
Bowman, declaring an 8 per cent increase in the annual dividend to
14p, said a strong performance in the US - where profits rose 31 per
cent - helped the company ride out the tough conditions in the eurozone.
Trading profits in the spirits and wine division as a whole rose 4
per cent to £522m, helped by Allied’s recent string of
acquisitions.
During the period, Sauza tequila became the world’s fastest-growing
premium spirits brand, with volumes up a hefty 28 per cent.
Allied’s burgeoning wine business grew volumes by 18 per cent,
mainly due to the acquisition of Bodegas y Bodegas in December 2001
and Mumm Cuvee Napa.
Trading profit in Europe dropped 21 per cent to £114m, and 33
per cent before acquisitions were taken into account.
And there was a sharp cut of almost one-third in advertising spending
in the Asia Pacific region as a result of the SARS epidemic last spring.
Meanwhile, profits at Allied’s quick service restaurants Dunkin’
Donuts and Baskin Robbins climbed 8 per cent.
There has been speculation that Allied will eventually pursue a merger
with another major spirits player to try and make up some headway
on Diageo, with Pernod and Bacardi of France and Brown-Forman of the
US said to be the desired targets.
But Bowman said that Allied Domecq was not talking to anybody currently. Articles Courtesy of The Scotsman
Sweden
faces EU fines if it fails to cut tax on Scotch whisky imports PRESSURE is building on Sweden to cuts its tax on Scotch
whisky after being warned by the European Union that its regulations
on importing alcohol violate market rules.
Under Swedish law, those wanting to import alcohol for personal use
have to apply to the country’s strict monopoly, Systembolage,
to act as a selling intermediary. The European Commission argues that
Sweden is depriving companies and individuals their rights under EU
law, saying companies have a right to sell products throughout the
15-nation bloc unhindered.
The criticism came just weeks after Denmark gave a major boost to
the whisky industry by slashing its tax on Scotch, making it cheaper
to buy a bottle in Copenhagen than it is in Edinburgh.
An EU spokesman, said of the Swedish process: "It’s complicated
and it’s very expensive so it’s a major disincentive."
If Sweden, which applies duty on whisky at twice the UK rate, does
not apply European market rules, it faces being fined heavily by the
EU high court.
The move was welcomed by the Scotch Whisky Association, which claimed
that liberalising the market will increase pressure for excise tax
to be bought down.
David Williamson, of the association, said: "We welcome the move
because it is introducing a simple and less complicated system for
consumers who want to buy alcohol from abroad."
Brussels has also ordered Sweden to abolish its current limits on
the amount of duty free that may be brought in by individuals for
personal consumption from 1 January, 2004.
Williamson said: "Individuals will be allowed to bring back ten
litres of alcohol without incurring additional taxation. In light
of this, Denmark has cut its duty by
