Whisky Downturn Slows Diageo's Scotch Expansion Spend

Source: Just-DrinksWhisky Downturn Slows Diageo's Scotch Expansion Spend

The downturn in sales of Scotch globally has prompted Diageo to slow the pace of its whisky production expansion in Scotland.

In 2012, the company embarked on a five-year programme to increase its Scotch whisky output, with GBP1bn (US$1.55bn) being pumped into its operations in the country. As part of the programme, Diageo said last year that it would build a new GBP50m (US$75.5m) malt whisky distillery in the Highlands as part of the programme.

The new facility, construction of which was scheduled to start this year, will produce around 13m litres of spirit per year, dwarfing Diageo's 10m-litre-per-year facility at Roseisle that opened in 2010.

However, just-drinks has learned today that a dip in sales for the Scotch category has led Diageo to rein in its Scotch investment for the time being. A joint just-drinks/The IWSR report into the Scotch category globally, released earlier this month, found that sales of Scotch in 2013 fell by 0.8% to 906m cases, with 14 of the category's top 25 markets showing a decline.

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