SCOTCH whisky distiller Morrison Bowmore is to produce and bottle the Drambuie liqueur at its Glasgow base, replacing the service provided by rival Glenmorangie.
Morrison Bowmore, the maker of Bowmore and Auchentoshan whiskies, announced the deal yesterday as it revealed a 15 per cent rise in annual profits to around 3.6 million – boosted by its decision to concentrate on high-margin single malts.
The firm's provisional results, due to be filed with Companies House within the next two months, showed a slight drop in turnover to 37m in 2008 as the company continued its withdrawal from the high-volume blended whiskies market.
Around four million bottles of Drambuie a year are to be produced from Morrison Bowmore's Springburn base from 2010, using the facilities previously utilised for the firm's blended products.
The services to be provided by Morrison Bowmore include whisky procurement, blending and bottling, warehousing and logistics. Morrison Bowmore is to invest around 1m in readying the facilities for Drambuie.
The arrangement will double the size of the company's existing bottling output and create between ten and 20 new jobs.
Morrison Bowmore chief executive Mike Keiller told The Scotsman: "This is a very good news story for us. Over the past few years, we have got out of blended products and are focusing on our single malts. This has left us withe excess capacity as facilities were designed for a much bigger capacity operation."
He added: "Glenmorangie have essentially decided to follow the same route, but managed to take advantage of the commercial property market last year and come to a deal with Diageo to sell off its headquarters.
"It is partly because of this that this new business has come to us."
Drambuie is to lease the facilities for an undisclosed sum, but Keiller said the agreement would have a "significant impact" on its profits in the 12 months after Drambuie starts production at the site.
Glenmorangie announced last summer that it was to sell its Broxburn, West Lothian, headquarters to drinks giant Diageo as a result of its decision to concentrate on its single malt Scotch whisky brands, Glenmorangie and Ardbeg.
It recently announced that it is to move to a new purpose-built bottling facility in Livingston in 2010. The existing Glenmorangie facility is due to cease all blending and bottling activities within the next 18 months.
Phil Parnell, chief executive of Drambuie, said: "This represents an exciting new phase in the rejuvenation of the Drambuie brand and will provide real benefits to both companies.
"We and Morrison Bowmore are of similar size, we share the same philosophy of premium brands, with an emphasis on the highest quality of product and packaging and we see great scope for synergy between our two companies."