Diageo sinks £1bn into Scotch whisky

The drinks giant is embarking on a five-year investment plan to boost UK Scotch whisky production. Drinks all round in the Scottish Parliament tonight, then.

by Rebecca Burn-Callander
Last Updated: 01 Apr 2015
As demand for Scotch whisky in emerging markets continues to rise, Diageo has announced plans to spend a heady £1bn on scaling up production. Plans include a new distillery in Speyside (perhaps two if sales remain high), as well as new storage facilities to hold the extra sprit. The investment is set to create around 100 new full-time jobs and 250 part-time roles in Scotland.

Diageo, which is the largest producer of Scotch whisky in the world with around a third of the global market, has profited in recent years from the popularity of Bells, J&B, and market leader Johnnie Walker. In just five years, sales have grown 50%: Diageo is set to make a predicted £3bn from Scotch alone this financial year.

The £1bn investment may seem a hefty sum to spend on a relatively low output industry. Whisky is only technically whisky after it has been left to mature for three years, after all. Hardly a lightning-speed manufacturing process. But the vast margins make up for the trouble, with just one bottle of single malt selling for upwards of £500 in some quarters

And Diageo chief executive Paul Walsh reckons that this will remain a high-growth market for the company: ‘Scotch whisky is a significant manufacturing export industry,’ he says.

MT will down a dram to that.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today