Bacardi invests for whisky success

By Neil Merrett

- Last updated on GMT

Related tags Scotch whisky industry Scotch whisky

Spirits group Bacardi yesterday announced a $250m (€183m)
investment into production of its Scotch whisky brands amidst
increasing global demand for the drink.

The group, which has a strong presence in the sector through its Dewar's label, said it expected the funding to boost its production and distribution capabilities to meet increasing demand particularly in Asian markets. The ten year investment plan, hailed by Bacardi as one of the most significant in the industry's history, comes amidst growing opportunities for distillers in the rapidly growing export market. Whisky exports recorded unprecedented sales of €3.7bn in 2006, up four per cent over the previous year, according to the Scotch Whisky Association (SWA), Bacardi president Andreas Gembler said that investment would be vital in meeting the opportunities for Whisky production in emerging markets like Asia in particular. "We will invest more than $250 (€183m) milliondollars in additional capacity to meet these needs, creating an entirely new infrastructure to support higher inventories of maturing whisky and increasing our blending, bottling and packing capabilities,"​ he stated. This will result in the construction of new product supply sites in Scotland, along with the addition of maturation warehouses and a blend centre, according to the company. It will also move to redevelop its existing plant in Parkhead, Glasgow. The SWA's David Williamson told that the move generally reflected the increasing optimism felt throughout the Scotch whisky industry with current market conditions creating a market boom. "Following last years record export values, industry prospects are as bright as they have been in many years,"​ he said. However, Bacardi is not the only producer to pick up on this trend, with a wealth of companies both large and small upping investment to profit from demand, Williamson added. He said that the booming export market for the product was being led by demand in countries like the US where sales values rose 7 per cent last year, as well as emerging markets like China. Williamson also pointed to the decision last month by India's Central Board of Excise and Customs (CEBC) to abolish additional tariffs on imported spirits as an example of the exciting opportunities that lie ahead for producers. The CEBC said that the additional duty imposed over the 150 per cent basic customs charge on spirit and liquors would no longer be permitted. Williamson suggested that in this new environment, Scotch whisky brands would be better able to compete with rival domestic spirits in the country, as well as giving some consumers there first taste of the drink. At present, whisky is estimated to account for less than one per cent of spirits volume in the country, he said.

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