Famous Grouse and Macallan owner Edrington said yesterday that it was confident about its long-term prospects, despite a slowing down in the rate of growth. Global sales rose by just 3 per cent last year against 6 per cent in the previous 12 months.
The Glasgow-based company, which is owned by the philanthropic Robertson Trust, said pre-tax profits rose by a similar percentage against 13 per cent in 2012. Over the past five years turnover and profit have increased by 45 per cent and 84 per cent respectively.
Developing markets have proved lucrative for Scotch brands as a growing number of affluent middle-class consumers seek to cement their status with western luxuries and brands.
However, Edrington warned that political problems have impacted two of its key growth markets. The Ukraine has been hit by political turmoil, with the impact of sanctions and economic uncertainty meaning Russia is also affected. And in China, anti-corruption measures have slowed down corporate entertaining and the giving of whisky as a gift among business people.
The firm also noted new laws in Russia and Turkey that limit the advertising of alcoholic drinks, and the Scottish Government’s attempts to introduce a minimum alcohol price. But it said the large number of markets it operates in will help it make up for any shortfalls with growth elsewhere.
The premium whisky and rum markets are both forecast to grow over the longer term, and Edrington is investing more than £100m in its Macallan estate. It is also preparing its Snow Leopard vodka for new international markets in Asia and the US. The brand was created to fund conservation of an endangered species and joined the portfolio in 2013.
During the year, Edrington launched sales and distribution companies in south-east Asia, the Middle East and the US, which it said “transformed” its routes to market. The firm, which also owns Highland Park, Cutty Sark and Brugal rum, anticipates that those will be the fastest growth areas for Scotch exports.
In the year to March global pre-tax profits were £174m on turnover of £607.7m. Chief executive Ian Curle, below, said: “The market for premium spirits worldwide continues to grow with more and more consumers gaining an appreciation for our brands. “Last year, we made significant investments in our route to market and now own the distribution capability in 11 countries which, together with our joint ventures, collectively represent 80 per cent of Edrington’s total sales.
“Our strategy of investing in quality and long-term growth will continue this year. We have committed over £100m to transform The Macallan estate with a new distillery and visitor centre, consolidating The Macallan’s position among the world’s leading luxury spirits as well as delivering additional capacity to meet growing demand.
“We remain optimistic about the company’s long-term prospects, despite continuing economic headwinds in some countries and political unrest in others.”
Edrington said in its annual report that its confidence was reflected in the record number of staff it hired last year. It took on 239 workers, taking its headcount beyond 2,300.