Scotland currently has 102 distilleries spread from the Highland Park distillery in the Orkney Islands, Scotland’s northernmost, to the recently opened Annandale Distillery close to Scotland’s border with England in the south.
But almost half of Scotland’s distilleries (40 percent) are ultimately owned by companies based overseas. Of these countries, the major player is France. Despite France being famed for its wine and the home of cognac, pastis and a range of other popular spirits, in any French supermarket the space given over to a variety Scotch whiskies far outstrips that of any other liquor.
In France, whisky is big business and French companies haven’t been slow to open their wallets and snap up many of Scotland’s most famous whisky brands. While London-based Diageo, owners of Guinness, is the biggest player in the whisky market, owning 28 distilleries, French companies own at least 18 distilleries, well ahead of Japan (7) in the foreign ownership rankings.
In 2012, French drinks giant Remy Cointreau snapped up one of Islay’s most renowned distilleries, Bruichladdich — a snip at £58 million ($87 million).
The Herald’s research shows that just over 25 percent of distilleries in Scotland are in Scottish ownership, with most of them being comparatively small enterprises (though famous, courtesy of their whisky brands) such as Edrington Group, who distill The Macallan and Highland Park, and Wm Grant and Sons, producers of Glenfiddich.
The research didn’t examine distillery output or corporate profits but concentrated purely on the geographical spread of ownership of Scotch Whisky, a product so inextricably bound up with Scotland’s identity.
For a liquor to carry the label “Scotch Whisky” the over-arching requirement is that it must be produced at a distillery in Scotland from water and malted barley. The full regulations are set out in the Scotch Whisky Regulations 2009. The effect of these regulations is to geographically define where Scotch Whisky may be produced so that the industry is less vulnerable to outsourcing than, for example, textile production in Scotland.
Because, therefore, by definition, Scotch Whisky can’t be produced in, say, Thailand, any foreign company wishing to own a dram or two of Scotch Whisky output must look to acquire whisky undertakings based in Scotland. Again taking Thailand as an example, The Herald reports that no less than five Thai companies have interests in the Scotch Whisky sector.
The past 15 years has seen a resurgence of interest in Scotch Whisky with the opening of a number of new distilleries and the expansion of industry capacity. On the island of Arran, in the river Clyde, a new distillery opened in 1995. Its range of age-statement malts has only recently become available emphasizing that a long incubation period for malt whisky production and sale is not necessarily a disincentive for entry into a lucrative, niche market.
More recently, what’s possibly Scotland’s most remote mainland distillery, situated in Ardnamurchan on Scotland’s west coast, went into production in June 2014. But those wishing to sample its first fill casks will need patience since the first bottling of single malt whisky won’t take place till 2024 at the earliest.
Similarly, in November last year, Scotland’s newest distillery, Annandale Distillery, near Annan, after extensive redevelopment, opened its doors to the public and resumed whisky production after a gap of 95 years.
Some key figures recently published by the Scotch Whisky Association help explain this ‘rush to whisky’ and why whisky is so important, not just to Scotland, but to the UK economy:
• The overall economic contribution of Scotch Whisky industry to UK is almost £5 billion ($7.5 billion).
• The direct economic impact of the Scotch Whisky industry, ignoring its wider economic benefits, is £3.3 billion, up 21 percent since 2008.
• Each year, Scotch Whisky producers spend £1.8 billion annually on suppliers with 90 percent of that expenditure spent in the UK, including £1.4 billion in Scotland. Dry goods, including bottles and packaging, cereals, energy and transport and distribution make up the majority of purchases.
• The industry supports 40,300 jobs in the UK — up from around 35,000 in 2008 — in a range of sectors including glass manufacturing and labelling. This total includes 10,900 people directly employed by the industry in Scotland.
• Every job in Scotch Whisky supports a further 2.7 British jobs.
• Although exports of Scotch Whisky recently slowed, despite that, the industry is expanding with around 30 new distilleries being planned or built across Scotland. Capital investment reached £142m in 2013, up 31 percent since 2008.
• Scotch Whisky exports are an important element of the UK’s balance of trade. They’re valued at around £4 billion a year. Without Scotch Whisky exports the UK’s trade deficit would have been 16 percent greater in 2013.
