Each week, we bring you the latest whisky news on WhiskyCast, but a lot can happen during the week. Now, you can keep up with whisky news as it happens here on WhiskyCast.com!
June 19, 2013 – Edrington Group will end its U.S. distribution agreement with Rémy Cointreau at the end of March, 2014, and will form Edrington USA as a wholly-owned subsidiary to take over importing and distribution for the company’s whisky and spirits portfolio. Remy executives confirmed the end of the partnership last week, but Edrington had declined to release specifics on its plans until after a major company-wide conference in Scotland earlier this month.
The company will also set up similar units in Southeast Asia and the Middle East to distribute The Macallan and Highland Park single malt Scotch whiskies, The Famous Grouse and Cutty Sark blended Scotches, Brugal Rum, and Snow Leopard vodka. While the US market is the largest export market by volume for Scotch whisky in general, the new units will be responsible for around 26% of Edrington’s global sales.
In the US, Edrington and Rémy Cointreau’s US unit had worked together since 1985. when Rémy’s US unit started handling distribution for Edrington’s Scotch whisky brands. Edrington had been working with Beam Global’s Asian unit in Southeast Asia, and the company’s new Singapore-based unit will take over in that region October 1. Middle East distribution will be handled in a Dubai-based joint venture with FIX Wines & Spirits, which had been handling Edrington’s portfolio in the Middle East and Northern Africa for the last five years.
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Blavod announced its plans Friday to stop distributing Bruichladdich’s whiskies in the UK as part of a plan to grow its own portfolio following the acquisition earlier this week of the Blackwood’s gin and vodka brands. However, Just-Drinks.com reports Bruichladdich initiated the move, and will create its own distribution company as of July 1, 2013, when the deal between Bruichladdich and Blavod expires. Bruichladdich UK will handle distribution for the company’s Bruichladdich, Octomore, and Port Charlotte single malts, and will also take over distribution of The Botanist gin from Gordon & MacPhail. The move will bring all of Bruichladdich’s brands into one UK sales network for the first time.
The move is the latest in what appears to be a growing trend among whisky producers to bring their distribution networks in-house instead of working with potential competitors. Earlier this week, Edrington Group confirmed that it will take over US distribution of its Scotch whisky and rum portfolio from Rémy Cointreau’s US unit next spring, in a move that was widely expected after Rémy’s $90 million acquisition of Bruichladdich last year. While Bruichladdich managing director Simon Coughlin told WhiskyCast’s Mark Gillespie in a recent interview that there is no rush to move its whiskies into Rémy’s global distribution network, it would be logical to expect such a move in the future.
“There are a number of contracts in place, and were many, many countries that we didn’t have contracts, so we’re going to work with our partners that we’ve had for many years and we’ll come to solutions. But, you know, it would seem unreasonable if you have a distribution chain around the world why you wouldn’t use it.”
Distribution companies are often referred to as importers when dealing in spirits outside their home country. In the Bruichladdich UK case, the unit will be responsible for sales and marketing of Bruichladdich’s portfolio on the wholesale level and working with bars and retailers. In the US, a distribution company/importer serves as the distiller’s representative, arranging for shipments, customs clearance, marketing and advertising, and managing contracts with distributors in each state. Those distributors supply stock to bars and retailers under the US-specific “three-tier” system for liquor distribution. In many cases, the US-based company is a wholly-owned subsidiary of the distillery owner.
June 14, 2013 – The fledgling Teeling Whiskey Company is only a year old, but has released the first in a new Vintage Reserve series of Irish single malt whiskies. Silver Reserve is a 21-year-old single malt finished in Sauternes wine casks, and company founder Jack Teeling told WhiskyCast’s Mark Gillespie today that it’s the first Irish whiskey ever to use a Sauternes finish. Silver Reserve will be followed in the coming months by 25 and 30-year-old single malts.
Teeling founded the company in April of 2012 after leaving Cooley Whiskey, which his family formed in 1987 and sold to Beam in December of 2011. The company has a long-term supply contract with Cooley for new make and aged spirit, but has also been sourcing Irish whiskey casks from other suppliers. The Silver Reserve comes from one of those suppliers, Teeling declined to identify the specific distillery during a phone interview today, but said it is an Irish distillery “known for its single malts”.
Silver Reserve joins Teeling’s Poitin white spirit (which he refers to as “Irish moonshine), and an Irish whiskey finished in Flor de Cana Rum casks in the company’s portfolio. It will be available initially in Ireland at the Celtic Whiskey Shop in Dublin, at Dublin’s airport, and selected retail outlets. Wider distribution is expected later this year in the UK, Europe, Canada, and New Zealand.
Jack Teeling is also nearing the end of negotiations for a parcel of land in Dublin to be the site of the Irish capital’s first working distillery since 1976, when the Powers Distillery on Johns Lane closed. The site is in the Marrowbone Lane area near the site where Teeling’s ancestors built the family’s original distillery in 1782. He hopes to have the site acquired and planning permission received in time for construction to begin by the end of 2013, with a potential opening at the end of 2014.
For more on this story, listen to Mark Gillespie’s interview with Jack Teeling on this weekend’s episode of WhiskyCast.
June 14, 2013 – After 14 years in mothballs, Glen Keith Distillery in Speyside is back in business. Chivas Brothers CEO Christian Porta and Scottish Rural Affairs Secretary Richard Lochhead presided over a re-commissioning ceremony at the distillery in Keith today. The ceremony follows a year-long renovation project that saw the distillery fitted with new plumbing and equipment to replace worn-out gear that had received minimal maintenance following the closure of Glen Keith by Seagram’s in 1999. In addition, a new mash-house and tun room was constructed to give the distillery a new mash tun and a total of 15 washbacks. The upgrade is expected to give Glen Keith a 50% greater distillation capacity than the distillery had when it closed in 1999, with an estimated capacity of 4.5 million litres of spirit annually.
Chivas Brothers acquired the distillery in 2005 as part of parent company Pernod Ricard’s acquisition of Allied Domecq, and had been using some of the distillery’s buildings for laboratory work and office space. Glen Keith opened in 1960, and is located across the road from the Chivas-owned Strathisla Distillery. While a limited amount of Glen Keith production was bottled in the past, the distillery’s output will once again be earmarked for Chivas Regal and Royal Salute blended Scotch whiskies.
The Scotsman reports that Porta plans to move ahead with construction of a new distillery on the site of the former Imperial Distillery in Carron, despite a 5% drop in Scotch whisky sales globally during 2012. Planning permission has already been granted for the new distillery, which is expected to begin production by the end of 2014. He told The Scotsman that he remains confident in the long-term future for Scotch whisky sales.
“The slowdown has been due to the world economy and political changes in China, which have effected the consumption of luxury goods and other imports. But all of the main growth factors for Scotch whisky are still there – growth in emerging market economies, even if they have slowed, an increase in the size of the middle classes and the number high net-worth individuals in Brazil, Russia, India and China, and continued urbanisation as people move from the countryside to cities.”
Porta, who will return to Paris later this year to take up a management role at Pernod Ricard Europe, is spending approximately $75 million USD annually to increase production capacity at the Chivas Brothers distilleries in Scotland. In addition to the Glen Keith revival, the company expanded capacity last year by 25% with projects at Tormore, Longmorn, Glentauchers, and Glenallachie distilleries, and opened a new stillhouse at The Glenlivet three years ago that boosted capacity by 75%.
June 13, 2013 – The source and destination of the Scotch whisky being hauled in a tanker truck that flipped and caught fire in Woodbridge, New Jersey last week has been identified. The whisky in the tanker was Clan MacGregor blended Scotch being delivered to the William Grant & Sons bottling plant in nearby Edison, New Jersey, according to a company executive.
The truck overturned June 5 in a residential neighborhood, struck a parked car and a utility pole, and briefly caught fire when whisky spilled from a relief valve on top of the tank and ignited. Firefighters from the nearby Fords Fire Company in Woodbridge were on the scene within minutes, and extinguished the fire before the bulk of the whisky inside the tank could erupt. The truck’s driver suffered minor injuries in the accident, and was treated at an area hospital.
Clan MacGregor is blended at the William Grant & Sons facilities in Scotland, and product destined for the U.S. market is shipped in bulk to the Grant facility in Edison for bottling. U.K. laws allow bulk exports of blended Scotch whisky for bottling outside of Scotland, but the practice is generally limited to so-called “value” brands. Most Scotch whisky producers bottle their premium brands of blended Scotch in Scotland, and U.K. laws mandate all single malt Scotch whiskies be bottled exclusively in Scotland.
June 12, 2013 – Edrington Group will end its U.S. distribution agreement with Rémy Cointreau at the end of March, 2014. The two companies have worked together since 1985, when Rémy’s US unit started handling distribution for Edrington’s Scotch whisky brands. Rémy executives announced the decision in Paris Tuesday during a presentation to analysts on the company’s annual results.
The current deal covers The Macallan and Highland Park single malt Scotch whiskies, The Famous Grouse and Cutty Sark blended Scotches, and Brugal Rum, and will not be renewed when the current contract expires on March 31, 2014. Edrington executives have not indicated their future plans for the US market, but there is strong speculation that the company will set up its own distribution unit for the world’s largest Scotch whisky market (by volume). The company already has an office and small marketing staff in New York City’s Chelsea neighborhood, and Just-Drinks.com cites an unidentified Rémy spokesperson as saying Edrington plans to handle its US distribution in-house.
The move was not unexpected following Rémy’s own entry into the Scotch whisky market with the acquisition of Bruichladdich last year. While Edrington officials never made any public statements criticizing the deal, it is expected that Rémy will eventually take over US distribution for Bruichladdich, and continuing the agreement would have put control of Edrington’s key brands in the hands of a direct competitor.
June 11, 2013 – F. Paul Pacult of the Spirit Journal has released his annual list of the world’s top spirits, with whiskies dominating the top 10 and a first-ever tie for the title of “Best Spirit in the World”. Angel’s Envy Cask Strength Bourbon and Highland Park 25 Single Malt Scotch tied for the top spot. In a news release, Pacult described his difficulty in choosing between the two:
“I could not say that the Angel’s Envy was even a hair better than the great and venerable Highland Park 25 and therefore I ended up calling a tie for the Best Spirit in the World. Clearly, however, they were the two finest expressions of distillation that I tasted within the last twelve months.”
Whiskies took nine of the top ten spots counting the tie at the top. The rest of the Top Ten includes the 2012 George T. Stagg Bourbon from Buffalo Trace, Elijah Craig 20 Cask Strength Bourbon from Heaven Hill, the 30th Anniversary Edition single malt from St. George’s Spirits, Longmorn 16 Single Malt from Chivas Brothers, Heaven Hill’s 2012 Parker’s Heritage Collection Bourbon, Bowmore’s 10-year-old Dorus Mor (sold as Tempest outside the U.S.), and the Colonel E. H. Taylor Barrel Proof Bourbon from Buffalo Trace. The two non-whiskies in the top ten were the Christian Drouin 1992 Pays d’Auge Calvados from France and Brugal’s Papa Andres 2013 Edition Rum from the Dominican Republic.
The complete list includes 22 American whiskies, 18 Scotch whiskies, and 2 Irish whiskies, and can be found at the Spirit Journal’s web site.
June 11, 2013 – Speyside’s smallest distillery is to undergo a major expansion, including a 50% increase in its work force. The hiring process at Gordon & MacPhail’s Benromach Distillery in Forres will be easier than it sounds, though…since only one person will be needed to accomplish that 50% increase.
The distillery currently operates with a staff of two, Keith Cruickshank and Mike Ross, and a third distiller will be hired to help double production. Two new maturation warehouses will be built at the distillery, and Gordon & MacPhail will also hire Benromach’s first brand manager to handle marketing responsibilities at company headquarters in Elgin. In a news release, Gordon & MacPhail managing director Michael Urquhart said the family-owned company plans a seven-figure investment in Benromach.
“It’s been a huge success and we know we will need to increase production if we are to meet demand in the future. Whisky production is a business that needs vision and long term planning and this is a sign of the confidence we have in the Benromach brand.”
During an interview with WhiskyCast’s Mark Gillespie last month in Episode 425, Urquhart cited Benromach’s 40% increase in worldwide sales during 2012, as well as projections for continued growth. Benromach expressions are currently available in 40 countries around the world.
2013 marks the 15th anniversary of the distillery’s re-opening in 1998, after a 5-year refitting and renovation project following Gordon & MacPhail’s acqusition of Benromach in 1993.
June 13, 2013 – The Balvenie will release the latest batch of Malt Master David Stewart’s special Tun 1401 single malt later this week at the distillery’s Whisky Fête in London this week. The event will celebrate craftspeople and their creations, and will be held from June 13-15.
Stewart creates his Tun 1401 bottlings by selecting special casks of The Balvenie from the distillery’s inventory to be blended together in Tun 1401, one of the vatting tuns at the distillery. Batch #8 came from 9 American Oak casks and three European Oak ex-sherry barrels, and is being bottled at 50.2% ABV.
This batch will be released in the U.K. and European markets. Each batch is earmarked for a specific market in rotation — Batch #7 was released earlier this year in the global travel retail market, and the upcoming Batch #9 will likely be released in North America.
This story will be updated as more details become available.
June 13, 2013 – Taxes make up a significant portion of the price of a single bottle of whiskey, but one of those taxes may be on the way out. WHAS Television in Louisville reports Kentucky’s Congressional delegation is once again trying to end one of the so-called “barrel taxes” on whiskey and other distilled spirits producers.
The U.S. government (and many states) tax whisky production based on the amount of spirit that comes off the still, and again at the time the final product is bottled. However, distillers who age their product are not allowed to deduct the cost of holding that inventory while it matures, which can be as long as 18 years or more for some Bourbons. While the tax itself can be hard to explain, Kentucky Distillers Association President Eric Gregory compares it to the tax deduction for interest on home mortgages, in which a home owner can deduct the interest on one’s mortgage from income taxes each year. In a phone interview, Gregory explained that the current tax requires distillers to absorb the entire cost of maturing whiskey from the time it is distilled until the time it’s bottled (at which time the costs can be deducted), and puts Bourbon and other producers of aged spirits at a disadvantage to producers of vodka and other spirits that are typically not aged.
Kentucky Republican Rep. Andy Barr of Lexington and his colleagues are re-introducing the Aged Distilled Spirits Competitiveness Act. The bill was last introduced in 2011, but died in committee without receiving a vote.
This issue should not be compared with Kentucky’s state “ad valorem” tax, which imposes an annual property tax on each barrel of whiskey held in a distiller’s inventory. Distillers have complained for years that the tax costs them money that would be reinvested in production and jobs, while putting them at a competitive disadvantage to whiskey distillers in other areas.