Comment - Loch Lomond Distillers and the two faces of Scotch
Ever since Remy Cointreau put up the best part of US$90m for independent Islay distiller Bruichladdich last year, the Scotch industry has been wondering who's next in line for acquisition.
Well, we may have a winner.
Last week saw robust speculation that Loch Lomond Distillers, which claims to be the second-largest family-owned Scotch maker, is the target of a big-money takeover from a group of private investors. Talks are said to be at an advanced stage, although no one from the company is commenting. There has also been no word on who the interested party is, other than it's not one of the big names. So, who could it be?
Remy swooped for Bruichladdich because the Scotch producer had carved out a name for itself in the boutique whisky market with some canny marketing and a commitment to provenance, taken from founder Mark Reynier's previous life in the wine industry. When I spoke to CEO Simon Coughlin last year, he told me that supply was well short of demand. Loch Lomond comes from the other side of the Scotch spectrum - a company with no big-name brands but capable of producing 43m bottles a year of grain and malt whisky. This capacity may be its biggest selling point.
As global demand grows, Scotch makers are trying to up supply. Loch Lomond likely offers a ready-made solution for a medium-sized company with no bottling facilities and on the lookout for a grain supply. I'm afraid you'll find no answers here yet as to who that might be.
However, it will be interesting to see how much is paid for Loch Lomond, assuming a deal goes ahead. Will it be more than the Bruichladdich price tag? Which corner of the Scotch market holds the most value in the current climate? The art and traceability of Bruichladdich's heritage-building? Or the brute strength of Loch Lomond's production belt?
Wuliangye Yibin has warned China's spirits market is going though an adjustment after it posted a slowdown in profits growth in first-half results, according to local reports. ...
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