Diageo to invest £1bn in Scotch whisky
Drinks giant Diageo plans to invest £1 billion (€1.2 billion) in Scotch whisky production over the next five years, creating hundreds of jobs, the company said in an e-mailed statement.
The company which produces Scotch brands Johnnie Walker, Bells and J&B among others said it will spend £1 billion adding a malt distillery and expanding warehouse space in Scotland, to meet growing demand for whisky from emerging Asian markets.
The company said the plan will add more than 100 jobs at the world’s biggest distiller, approximately 250 construction jobs and up to 500 positions from the “knock-on effect” on the Scottish economy.
The investment also includes expansion of existing production, and Diageo will consider adding a second new distillery if demand warrants.
European revenue fell 1 per cent in the first nine months of the company's fiscal year on an organic basis, offset by gains in emerging markets like Latin America and higher-priced spirit sales. Scotch accounts for 27 per cent of Diageo's sales. Revenue in the category climbed 14 per cent in the fiscal first half, while volume climbed 8 per cent.
"This is a pivotal moment in the development of the Scotch whisky category for Diageo," chief executive officer Paul Walsh said in the statement.
"Over recent years our brands have achieved remarkable, sustained global growth. Scotch whisky is Scotland's most-celebrated manufactured export."
Pernod Ricard SA, the maker of Chivas Regal whisky, has invested about £40 million a year expanding and re-opening distilleries and expects to continue to invest in whisky capacity, Christian Porta, head of the Chivas unit, said at a conference May 30.
Additional reporting: Bloomberg