£40m splashed out on raising Pernod whisky production

DRINKS giant Pernod Ricard yesterday unveiled a £40 million investment programme for its Scotch whisky distilleries that will see production expanded at four sites to cope with growing demand from emerging markets.

The French group’s whisky and gin production arm, Chivas Brothers, will expand its Glenallachie, Glentauchers, Longmorn and Tormore distilleries on Speyside, as well as reopening its Glen Keith site, which was mothballed in 2000.

Chivas – whose brands include Ballantine’s, the Glenlivet and 100 Pipers – will also open a bottling hall at its plant in Paisley this summer to handle the packaging of its “premium” whiskies, including Chivas Regal and Royal Salute.

Such high-end brands are proving especially popular in emerging markets such as China, where drinking whisky has become a status symbol for the growing middle classes.

Christian Porta, chairman and chief executive of Chivas Brothers, Scotland’s second-largest distiller behind Johnnie Walker-owner Diageo, said: “We are committed to a capital expenditure of £40m annually.

“This investment, allied to strong market growth, a continued commitment to innovation and the best-suited portfolio to target the most profitable opportunities, will provide the basis for future value growth for our company.”

Porta told The Scotsman that the reopening of the Glen Keith distillery, announced last year, was on course and would be completed in March or April 2013.

He said the expansion of the further four distilleries announced yesterday would create further jobs on Speyside, but he is unsure at present how many posts will be added.

Chivas Brothers, bought by Pernod from Seagrams in 2002 and which added to its whisky brands in 2005 when it took over Allied Domecq, already employs about 1,600 people at 32 sites throughout the UK, the vast majority in Scotland.

As well as its 12 malt whisky distilleries and one grain distillery, the firm makes Beefeater and Plymouth gins from a pair of plants in southern England.

News of the latest expansion comes on top of a spate of investment at Pernod. The French firm reopened the Allt-a-bhainne distillery in 2005 and the Braeval site in 2008, as well as expanding output at Glen Burgie by 50 per cent in 2006 and at the Glenlivet by 75 per cent in 2010.

Pernod, along with Diageo and most smaller producers, has experienced rapid growth in emerging markets such as China, Latin America and South-East Asia in recent years.

Chivas has expanded its marketing in Asia by sponsoring European Tour golfing events staged in the Far East, as well as polo matches at which Princes William and Harry have played.

The company has unveiled a sponsorship deal for its Royal Salute brand with the regular gun salute at Tower Bridge in London and has released a special “Diamond Jubilee” bottling of Royal Salute.