Speyside Distillery raises glass to major Chinese deal

Speyside Distillery, near Kingussie, is to ramp up production of its single malt whisky after cheering a major new distribution deal.

The agreement with a Chinese firm will result in production rising by about two-thirds from 600,000 litres to one million litres a year.

The deal will also see Luzhou Laojiao International Development, which is described as a “major force” in the global duty free retail market, distribute the distillery’s Spey and Beinn Dubh brands in China, where sales of Scotch whisky have been soaring.

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Site owner Speyside Distillers said the increase in production would not lead to the introduction of any new automation processes, but it could result in two jobs being created.

The agreement will place the company’s spirits portfolio in duty free outlets across China, the US and other key global markets, and Luzhou Laojiao will also handle distribution of Speyside Distillery products across China in its own retail stores.

Senior staff from the Chinese firm signed the distribution deal while on a visit to the distillery, which is based close to Kingussie at the foot of the Cairngorms.

Its range comprises five core single malt expressions, which is complemented with regular limited edition bottlings from historic warehouse stock. The distillery added Beinn Dubh ruby black whisky to its collection in 2015 and, more recently, the Byron’s Gin range.

John McDonough (pictured above), chief executive of Speyside Distillers, said: “Although our brands have been present in China for a number of years, most of the distribution and sales activity has been within the southern provinces.

“This distribution agreement with Luzhou Laojiao will enable us to move to a completely different level and will help to meet the growing demand for single malt Scotch whisky from China’s urbanised, affluent young professionals.

“We anticipate that the supply demand for global duty free and duty paid within China will have a significant impact on production, which we forecast will rise by around 66 per cent from our current 600,000 litres of spirit a year to one million litres.”

Managing director Patricia Dillon said: “Our international reach has grown significantly in the past five years.

“Due to John’s existing business operations in Taiwan when he bought the distillery, we were very quickly able to cultivate a market for Spey in that territory and it has historically always been a key driver for sales.

“China is a market that we have watched very diligently for a number of years, but we needed the support of a major partner before we could contemplate making the significant inroads that we now anticipate.”