Scapa Scotch relaunched as Chivas shifts to luxury market

Published on Saturday 6 December 2008 13:37

LUXURY whisky producer Chivas Brothers is this month relaunching Scapa, the Oracadian single malt it bought in 2005, as it continues to shift its focus to the premium end of the UK market.

Chivas, the British arm of French drinks giant Pernod Ricard, is repositioning Scapa as a 16-year-old luxury malt as producers warn they are bracing themselves for a downturn in the UK market, particularly in the standard single malt category. Scapa was previously aged for 14 years.

Earlier this year Chivas sold its Glendronach distillery in Speyside as its chief executive Christian Porta revealed its intention to focus on 15 high end brands including Glenlivet and its flagship drink, Chivas Regal.

Although overall Pernod Ricard sales soared 13% between July and September, Chivas executives have admitted they expect to struggle in the UK market next year as the consumer slowdown takes hold of the whisky market.

However, they believe the premium end of the market will hold up better as wealthy drinkers continue to indulge.

"We are struggling in the UK. Spain is also difficult, as is the US," said one senior executive. "But the UK only represents 5% of our market and we still have opportunities in the UK."

Pernod Ricard is investing heavily in the Bric economies – Brazil, Russian, India and China – and says that Scottish whisky is also seeing strong demand in markets such as France.

Last month the firm launched a luxury version of its Beefeater gin brand, Beefeater 24, in an attempt to gain market share in the high end gin market.

Diageo chief executive Paul Walsh also admitted recently that he is bracing himself for a dip in the company's UK growth although he believes there will still be a market for "affordable luxuries" such as Johnnie Walker Black Label during the recession.

Whisky producers last week heaved a sigh of relief after the Government decided against proposals to introduce a minimum price for alcohol in supermarkets as it seeks to crack down on the UK's binge drinking culture.

Whisky bosses said although they are also opposed to heavy discounting themselves as it ruins the reputation of their brands, there is not enough evidence to show that introducing a minimum price would prevent problem drinkers from abusing alcohol.