Diageo Delays Scotch Whisky Distillery Expansion Plans

[William]

Just over two years into Diageo's £1 billion Scotch whisky expansion plan there appears to be a global economic slowdown in the world's demand for whisky and Diageo have decided to delay their plans to expand its production capacity in Scotland.

In response to the global slowdown in demand for Scotch whisky around the world plans for a new £50million distillery adjacent to the company's existing Teaninich distillery near Alness in the Highlands have been put on hold.

They have also delayed investment in the expansion of some of its existing malt whisky distilleries, including an £18million expansion project to substantially increase the capacity of the Mortlach distillery at Dufftown, and a £30million project at the Clynelish distillery in Sutherland.

More details here:
www.scotchmaltwhisky.co.uk/diageodelayexpansion.htm
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There's no bad whisky. Just good whisky and better whisky.

[Quaich1]

I wonder how much the swell of NAS expressions by so many distilleries with continued price rise for even these younger scotches is negatively impacting the whisky market at large. Are we talking about global economic downturn in general, regardless of the whisky world or are we talking partly about a reaction from the world of whisky drinkers.
Just asking....Opinions?
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"Always carry a large flagon of whisky in case of snakebite and furthermore always carry a small snake."
W.C. Fields (1880-1946)

[Keith]

You make some very good points Murray, every whisky drinker will have there limit to what they are willing and able to pay and perhaps the greed of the whisky companies is coming back to shoot them in the foot.

[Innes]

As far as single malt whisky sales in existing/established markets, they wouldnt have been helped by price increases and expensive NAS whiskies.

[Whisky Dog]

You wouldn't think that a 1% drop in sales over the past year would halt expansion plans to this extent but looking closer sales volumes are down 6% and perhaps Diageo are forcasting they will continue to drop given this move.

Historically whisky sales has always had its ups and downs, will the next downturn be caused by the whisky companies greed. Over the past few years especially we have seen huge price rises effecting entry level blends right up to the premium single malts, consumers may well be starting to look at cheaper alternatives.

[Big Mac]

With the amount of distilleries that Diageo own they are bound to be the first to spot a trend for a global downturn in sales. Perhaps pricing is reponsible for this downturn, if so it is something the industry can do something about.

[opelfruit]

Ha ha ha ha ha ha.


I'm pretty sure I said a while back that global markets are very dynamic, the whisky industry is the total opposite. Taking decisions based on a rapid increase in product demand for a product that takes years or even decades to meet that demand is silly. Filling the gap with crap NAS only annoys the customers. And then 'puff' the global market changes and bye bye demand.

Can't say I feel sorry for them.
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"Too much of anything is bad, but too much good whisky is barely enough."