THE new South African owner of one of Scotland’s best-known whisky producers has pledged major investment in the business after a £160 million acquisition swoop.
The latest in a string of big ticket transactions in the whisky industry saw drinks group Distell buy Burn Stewart Distillers – behind single malts including Bunnahabhain and Tobermory and the Black Bottle blend – from owners CL World Brands and Trinidad and Tobago-based Angostura.
East Kilbride-based Burn Stewart, which employs some 270 people, owns three single malt whisky distilleries, a blending and maturation facility, a bottling hall and a storage site.
Distell’s managing director Jan Scannell – who said the deal had been initiated by the South African firm – described it as a “very significant development”.
He told The Scotsman that the group was looking at funding a growth strategy for the business.
“Over the coming weeks and months we will have a better understanding for the need for investment in Burn Stewart but it is too early to say where that will be,” he said. “We see huge potential globally for the business, particularly in emerging markets.”
Distell will also look at areas where the brands of each company could benefit from their combined global distribution network.
The success Burn Stewart has had in establishing the Scottish Leader brand in Taiwan in particular is thought to have been a major attraction for Distell which is keen to market its existing brands in the Asian nation.
The South African company, which owns brands including Amarula cream liqueur, has strong footholds in markets such as Latin America which the Scottish business could benefit from.
Burn Stewart and Distell have worked together for the past 14 years and operate a joint venture to market Bunnahabhain, Black Bottle and Scottish Leader brands in sub-Saharan Africa.
Scannell said the deal would enable it to capitalise on the continuing global growth in whisky consumption and gave it access to “scarce blended and single malt stocks”.
He stressed the existing management team would remain in place.
“We have acquired a business with a portfolio of strong brands, backed by a sound production and marketing team. Their expertise is integral to the ongoing success of Burn Stewart.”
Burn Stewart managing director Fraser Thornton said he was “enthused by Distell’s plans to recapitalise and advance the business”.
“The close working relationship with Distell over the past 14 years has amply demonstrated the South African group’s capacity, experience and expertise to strengthen and grow the company.”
Bunnahabhain, Burn Stewart’s flagship single malt, is made on Islay. Tobermory is produced in the only distillery on the Isle of Mull and Scottish Leader is made at the Deanston Distillery situated in Doune near Stirling.
Marlon Holder, managing director of CL, which had paid £49m for Burn Stewart in 2002, said he was confident Distell would take the company to “the next level of its international development”.
The purchase marks the second time in recent years that Distell has invested in a major global spirits acquisition. In 2009 it acquired cognac brand Bisquit from Pernod Ricard.