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Whisky packaging whips up controversy

05-Dec-2003

Drinks giant Diageo has agreed to significant changes in the packaging of its Cardhu Scotch whisky. The move is designed to heal deep rifts that have emerged within the hugely conservative Scotch whisky industry over the company's initial decision to change the Cardhu blend but keep the same bottle.

Diageo said last month that it would blend Cardhu with 12-year-old malts from other Speyside distilleries as it could no longer meet foreign demand for the single malt. But rather than change the brand, Diageo used the same bottle and changed the label to read pure malt. The move upset distillers who felt that the integrity of the entire Scotch whisky industry was being undermined.

However, an agreement was finally reached with the Scotch Whisky Association (WSA) council at a meeting on 4 December. "Diageo promised to make significant changes to the packaging of the product including changing the colour of the bottle from brown to green, and to carry out additional promotional activity explaining to consumers the nature of the new product," said the association.

 

Diageo says that the packaging changes clearly differentiate the product, and the company has undertaken not to reformulate any of its other single malts in a similar manner. In a statement to the press, the company says that it will work with the rest of the industry to try and set down definitions for different segments of the Scotch whisky category in the future.

 

The matter has focused attention on the need for the industry to clarify for consumers the various categories within the Scotch Whisky market. To this end, the council agreed to press ahead urgently with work designed to set out definitions with most immediate focus on single malt Scotch Whisky. Diageo says that it will continue to review its packaging in the light of this work.

 

The issue is of importance because Diageo controls one-third of the scotch market. Most of the world's scotches, such as Johnnie Walker and J&B, are blends of malt and grain whiskies. Malt whisky takes more than a decade to mature and single malt - produced by only one distiller - has elite status among scotches.

 

Cardhu has been one of the fastest growing malt whisky brand in the world, particularly in Spain, France, Greece and Portugal. But as the company admits on its website, overseas demand for the single malt was not enough to justify the brand's continuation in its present form."We cannot deliver any more Cardhu 12-year-old single malt than we do at present," said Jonathan Driver, Diageo's global director. "Production cannot easily be increased beyond present capacity, and even if it could, it would be another 12 years before the additional product became available."

 

The UK's Guardian newspaper says that Scottish politicians have entered into the dispute, with the Scottish Nationalist party leader John Swinney calling for clear definitions of single malt, vatted malt and blends.

 

"I am delighted that the SWA has managed to find a solution to this issue which even only a short while ago looked to have polarised the industry to a degree that was unhelpful for everyone concerned," said SWA chief executive Gavin Hewitt. "The outcome today shows the value in continuing to keep talking to all parties, and underlines the central role that of the SWA and the work of the executive in brokering a deal. I hope that this matter can now be put behind us, and that the SWA and its members can concentrate on what we all do best, improving market access and increasing sales of Scotch Whisky around the world."

 

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