Speyside Distillery to ramp up production 66%

8th April, 2019 by Melita Kiely

Scotch whisky maker Speyside Distillery anticipates its production will increase by 66% to cater for Chinese demand after signing a distribution deal with Luzhou Laojiao International Development.

Speyside-distillery

John McDonough, chief executive officer of Speyside Distillers

Luzhou Laojiao International Development, a leader in the travel retail channel, will distribute Speyside Distillery’s Spey and Beinn Dubh brands in China, a market that saw Scotch whisky sales soar 34.8% in the first half of 2018, according to the whisky producer. Luzhou Laojiao will also distribute the brands in duty free markets in the US and other travel retail markets.

As a result, the Scotch whisky producer expects production to increase from 600,000 litres to one million litres of alcohol per year.

Distillery owner Speyside Distillers said the production increase would not result in new automation processes, but said it could create two new jobs.

John McDonough, chief executive officer of Speyside Distillers, said: “Although our brands have been present in China for a number of years, most of the distribution and sales activity has been within the southern provinces.

“This distribution agreement with Luzhou Laojiao will enable us to move to a completely different level and will help to meet the growing demand for single malt Scotch whisky from China’s urbanised, affluent young professionals.

“We anticipate that the supply demand for global duty free and duty paid within China will have a significant impact on production, which we forecast will rise by around 66% from our current 600,000 litres of spirit a year to one million litres.”

Luzhou Laojiao representatives signed the deal while on a visit to Speyside Distillery, which is located near Kingussie at the foot of the Cairngorms.

Patricia Dillon, managing director of Speyside Distillers, said: “Our international reach has grown significantly in the past five years and our brands are now present in 34 different countries.

“Due to John’s existing business operations in Taiwan when he bought the distillery, we were very quickly able to cultivate a market for Spey in that territory and it has historically always been a key driver for sales.

“Around 70% of our global sales currently come from that region, but this agreement with Luzhou Laojiao for global duty free and internally within China sets us on a path that will challenge the volume that we have in Taiwan.

“China is a market that we have watched very diligently for a number of years, but we needed the support of a major partner before we could contemplate making the significant inroads that we now anticipate.”

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