Chivas mulls new distillery after whisky exports surge

SCOTLAND’s second-biggest whisky producer is considering building a further distillery as drinkers in emerging economies continue to develop their taste for Scotch.

French drinks giant Pernod Ricard, which owns Chivas Brothers, yesterday said it is looking for emerging markets to account for 50 per cent of group sales in the next few years following last week’s bumper interim results.

News of the possible new distillery from Pernod comes less than a fortnight after rival Diageo, Scotland’s biggest whisky maker, said it was also mulling plans for a further site, just two years after opening a £40 million plant at Roseisle, in Moray.

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Christian Porta, chairman and chief executive of Chivas Brothers, said the group was also well-advanced in its plans to bring its Glen Keith distillery back into production in 2013 on the back of the continued robust performance of the sector.

“We are almost there in reopening all our distilleries, with Glen Keith early next year,” Porta said. “If we believe the Scotch industry will continue to grow, we will consider opening a new distillery.”

Glen Keith in Speyside was established on the site of a corn mill in 1957 by Chivas Brothers, which also owned the adjacent Strathisla distillery. Glen Keith was mothballed in 2000.

But Scotch exports have boomed in recent years. At last week’s results, the company revealed that half-year sales of Glenlivet rose 19 per cent, while the eponymous Chivas Regal brand was up 13 per cent.

On the back of this expansion, Chivas Brothers reopened the Allt a’Bhainne distillery in 2005, expanded Glenburgie’s production by 50 per cent in 2006, reopened Braeval in 2009 and increased Glenlivet production by 75 per cent in 2010.

Porta said the group had doubled its production for blended whisky via such moves and the reopening of Glen Keith would further increase distillery capacity by up to 15 per cent.

The march of Scotch has been particularly strong in emerging markets, helping Pernod to a 18 per cent jump in sales in Asia in the first half of its trading year.

However, Pierre Pringuet, Pernod’s chief executive, said emerging markets now also embraced the likes of Russia, Poland, Turkey, Ukraine, as well as Africa and Latin America.

Pernod has 39 per cent of its sales in emerging markets, which have been unscathed by the eurozone financial crisis. Pringuet said that, at current growth rates, it was feasible to have 50 per cent of its sales in emerging markets “in the next to or three years”.

He added that the increase would be achieved through organic growth and bolt on acquisitions.