Diageo offers to sell Whyte & MackayBy Becky Paskin
Diageo has offered to sell the whole of Whyte & Mackay save for two malt distilleries to address competition concerns raised by the Office of Fair Trading (OFT).
Having acquired Whyte & Mackay along with the majority share of United Spirits in July, Diageo has been the subject of a competition enquiry by the UK organisation.
The investigation found there to currently be “substantial competition in the retail sector between Bell’s whisky, a Diageo label, and Whyte & Mackay’s own-label and branded blended whisky”. It has been ruled that Diageo’s ownership of Whyte & Mackay will substantially reduce that competition, and potentially cause price increases for retailers.
Chris Walters, OFT chief economist and decision maker for the case, said: “These companies are two of the leading suppliers of blended bottled whisky in the UK, especially to supermarkets and other large retailers.
“Our investigation considered a wide range of evidence and we concluded that the likely loss of competition could give rise to higher prices for retailers, and ultimately consumers.”
As a result, Diageo has offered to sell the majority of its Whyte & Mackay business, including the Whyte & Mackay brand, private label operations and its two malt distilleries at Jura and Fettercairn, and the Invergordon grain distillery.
Diageo has proposed to keep the Dalmore and Tamnavulin malt distilleries that supply United Spirits and primary international markets.
“We are now considering Diageo’s offer to sell the bulk of the Whyte & Mackay business with the exception of two malt distilleries, to address our concerns,” Walters added.
A spokesperson for Diageo, said: “Diageo will be assisting the OFT with its on-going work. A further announcement will be made in due course and we are not in a position to comment further at this stage.”
The OFT did not find that the acquisition may lead to a substantial reduction of competition in the supply of bottled blended whisky to the on-trade, or in the supply of malt whisky, the supply of vodka or the bulk supply of whisky.