Whisky firm Grant plans Irish distillery

Published on Saturday 1 May 2010 13:38

WILLIAM Grant, the Scotch whisky company, is believed to be working on plans to build a distillery in Ireland following the £260 million acquisition last week of a number of brands from C&C Group.

Stella David, Grant's chief executive, said after buying Tullamore Dew whiskey and three liqueurs – Irish Mist, Carolans and Frangelico – the company would be making a "significant investment in Ireland".

David joined Glenfiddich producer William Grant last June from Bacardi, where she was head of global marketing and launched Bacardi Breezers.

Local sources say a bottling plant at Clonmel is a favoured site for any new distillery to produce Tullamore Dew, which is second to Jamesons in worldwide Irish whiskey sales.

Most of the well-known Irish whiskeys are made in just two distilleries and Tullamore has been produced in Cork since 1963.

But it is understood that William Grant wants to distil its own products and that building a distillery would enable it to become a significant player in Ireland. An announcement could be made within weeks.

While Scotch whisky cannot be made outside Scotland, Grant would be able to use any new facilities to produce white spirits. Its brand portfolio includes Hendrick's gin.

Tullamore Dew provides an opportunity to expand in one of the drinks industry's growth categories. While it sells 610,000 cases in 80 countries, Grant will want to build volumes significantly and local industry sources say that continuing to distill under contract would not allow it to achieve the desired scale .

Grant has declined to elaborate on its acquisition or its plans and a spokesman said he was "not aware of any such development", but the company will be mindful of the potential of Irish whiskey. It is the smallest of the "big four" categories – Scotch, Bourbon, Canadian and Irish – but is understood to be the fastest growing. It is also outstripping the sales growth of spirits such as tequila, vodka, and gin.

Grant is understood to have seen off competition from Suntory of Japan to acquire the brands from C&C.

Liam Igoe, an analyst at Goodbody in Ireland, said the price paid was about ?100 million (87m) more than expected. However, sources say the decision to pay full price may be underpinned by the planned expansion of the business.

C&C chairman Tony O'Brien said the decision to sell was not easy, but was in the interest of its shareholders.

The Dublin company will use the proceeds to pay down debt and will focus on its core cider and beer businesses. It makes Magners, and last year acquired the Scottish lager business Tennent's from Anheuser-Busch.

With C&C now virtually debt-free, analysts expect the company to use its strengthened balance sheet to return to the acquisition trail.