UK: Burn Stewart Distillers sale proves Scotch in robust health - MD

By | 15 April 2013

Burn Stewart Distilleries wants to expand into Africa

Burn Stewart Distilleries wants to expand into Africa

The sale of Burn Stewart Distilleries to Distell  is “another vote of confidence” in the booming Scotch whiskey industry, the company's MD has told just-drinks.

Earlier today (15 April), South Africa's Distell said it has acquired Burn Stewart for US$244m from CL World Brands, which owns Hine Cognac, and Angostura Limited, which owns Angostura Bitters. The deal gives Distell its first presence in the Scotch market and follows Rémy Cointreau's GBP58m (US$90m) takeover of Bruichladdich Distillery Company in September.

Speaking to just-drinks today, Burn Stewart MD Fraser Thornton said that the deal proves the long-term health of an industry that continues to post strong growth. Thornton said: “It's another organisation saying, the future looks really good and we're prepared and want to be a part of that. It's another tick in the box.”

According to recent just-drinks/IWSR figures, Scotch exports in the 12 months to the end of June grew in value by 12%, while the Scotch Whisky Association says sales values have risen by 87% in the past decade.

Thornton said Distell's knowledge of Africa will help expand Burn Stewart brands into an important future market. He said: “In Distell, we get a shareholder that can add value to the business, initially through access to increased and improving distribution across Africa.”

Asked where Burn Stewart will focus in Africa, Thornton said: “That's something we'll have to sit down with Distell and discuss.”

Thornton also said Distell has long been interested in entering the Scotch market, with a previous JV in Africa set up between the two companies in 2007 paving the way to today's announcement. 

Thornton said: “We are a known quantity and culturally we are quite a good fit. I've known the team in Distell for 15 years and there's a comfort and a mutual respect that comes from that.”

Thornton added that there will no job losses or changes at Burn Stewart, which has an annual output of 5m litres, from the takeover. He said: “It's good news for the employees, and the news was really well received by the employees this morning.”

Expert analysis

Spirits in South Africa

While the recent economic downturn continues to impact consumer spending within spirits, there was a turnaround in 2011. Volume growth was driven by whiskies, notably “sub-prop” brands that are considered both high quality as well as value for money in comparison to very premium whisky brands.

Sectors: Mergers & acquisitions, Spirits

Companies: Distell, Cointreau, CL World Brands, Scotch Whisky Association

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