IT HAS been a tough year for whisky. But this week when privately-owned Scottish whisky company Edrington revealed its annual results, both chief executive Ian Curle and chairman Sir Ian Good felt relaxed enough to go on holiday.
Perhaps as a friendly rival of Paul Walsh – chief executive of drinks giant Diageo – Curle knew when was good to get out of town.
Curle and Walsh work together as deputy chairman and chairman, respectively, of the Scotch Whisky Association.
This week, Walsh had terrible news to reveal – closure of a packaging plant in Kilmarnock and a distillery in Port Dundas, where 900 lost jobs would be almost impossible to replace.
But Glasgow-based Edrington, makers of Famous Grouse and The Macallan, had no such bad news to deliver. Global sales volumes may have been down 5 per cent, but considering the changes the group has been through in the last 18 months, never mind a faltering global economy, it was not a bad pass.
In fact, currency fluctuations meant the company made better profit margins – up 8 per cent. Edrington sells 90 per cent of its whisky overseas.
It was unusual, perhaps, that a significant part of the board left town for the announcement of its results, but then Edrington is an unusual company.
Owned by a charitable trust since the 1960s, the group may sometimes look and act like a PLC but it resolutely is not. A share of the group's profits go to the Robertson Trust, established by the three spinster granddaughters of the company's original founder, William Robertson. In 2008, the trust got £9.9 million from Edrington – a record pay-out.
But since 1999, when the group made a bold acquisition of United Distillers for £601m and became a brand-led drinks company like Pernod Ricard or Diageo rather than a bottler and distributor, it has acted like a profit-driven, growth-hungry PLC too, edging past the other big Scottish drinks group, William Grant, in terms of scale and reach.
One gets the impression this uniqueness suits Curle just fine. The 47-year-old chief executive prefers to do things on the quiet. It is one of the reasons he likes working for Edrington – all the benefits of a blue-chip company but none of the pressure.
The benefits of the family trust structure are clear. Although retained profits last year were down about £10m, Curle maintains a free hand with investment. Of course he answers to his board and the Robertson trustees, but there is overlap – Curle, Good and finance director Richard Hunter are trustees as well.
He spent £5m on a new bottling line in the Dominican Republic and £17m on a Macallan still house. If there is concern about how significantly the company's debt has grown, no-one is saying. Curle went more than £63m deeper into debt last year, mainly to fund the £313m price tag of its majority stake in Brugal. The company's debt pile has more than trebled since 2007 to £628m.
A former accountant, Curle probably has a firm hand on the company's balance sheet. But he tends to leave the public grandstanding to his chairman and predecessor, Sir Ian Good. Good, 65, is the more flamboyant character, while Curle says he prefers to keep his profile low and let the "product" speak for itself. Nor does Good, who has been with the company since 1969, have plans to retire just yet – he is standing for re-election to the board at the company's AGM in August.
As one industry insider puts it: "The two of them are excellent. They are very different characters. Ian Good is very much part of the best of the Scottish establishment. Ian Curle is more wiry, probably slightly less urbane. But then he is much younger."
This low profile allowed Curle to pull off one of the most dramatic events in the company's history so far – the £313m acquisition of Dominican Republic-based rum makers Brugal last year. Ever since he took over as chief executive of the company in 2004, Curle had been on the lookout to buy a brand that was not whisky. But a more common vodka or gin brand would have been problematic with its distribution partners at the time, Pernod Ricard and Remy Cointreau, which already owned brands in these categories.
For three long years Curle and his close lieutenants Hunter and secretary Martin Cooke worked on the deal, which remained a closely guarded secret until it was announced in February last year.
That Curle could keep the plans so quiet for so long was impressive, but also required that the trio would fly separately to Santo Domingo in order to negotiate with the rum-maker's president, George Arzeno Brugal. Hunter and Cooke even learned Spanish in secret.
The deal went down like a smooth golden-coloured liquor, and none too soon either. Curle was saddened that a year after the deal, Brugal, the grandson of the company's founder and "a true friend to Edrington" died after a short illness.
The similarities between the two companies are interesting. Both are old – Brugal was founded in 1888 – and both have close ties with charitable family trusts. And if whisky is an essential part of the fabric of Scotland, it is arguable rum that is even more so to the Dominican Republic. But where whisky has to fight at the Scottish and UK level to stave off threats like minimum pricing and higher taxes, rum in the Dominican Republic seems to have a cosier time of it. Brugal, which owns 80 per cent of its domestic market, is so iconic that its logo appears on the nation's road signs. It seems unlikely that the UK government would allow a similar promotion of an alcoholic beverage to drivers.
All this while Curle was also dealing with the fallout of its partners in Maxxium, a distribution company that ensured drinkers could get a shot of The Macallan in either New York or Tapei. As Pernod and Remi walked away, Edrington had to scramble to find a new partner – which it found with Illinois-based Beam Global.
If all this made Curle break a sweat he did not show it. But not much fazes the former rugby player, who was known for being a speedy winger and first-class player for West of Scotland. While Curle himself did not achieve any major honours, his son Ross has already overtaken his dad's sporting prowess on the field. Sixteen-year-old Ross recently made his international debut at fly-half for Scotland's Under-18 A team.
BACKGROUNDFORMER West of Scotland rugby player Ian Curle, 47, trained as an accountant at Arthur Andersen before he joined Edrington subsidiary Robertson & Baxter.
Part of his apprenticeship at the firm involved shovelling malt, but the rising star was appointed as operations director in 1997.
In November 1999, the group acquired Highland Distillers – for which Curle played a key role integrating the group.
In 2003 it was announced Curle would succeed Sir Ian Good as chief executive after a closely fought race for top job between Curle, marketing director Barrie Jackson and finance director Richard Hunter. The same year he took over, some of the group's employees went on strike. Then in 2005, Jackson left to run International Beverages, part of Thai Beverages. In 2008 Curle led the acquisition of rum company Brugal.
