Diageo will spend US$1.55bn on its Scotch operations over the next five years

Diageo will spend US$1.55bn on its Scotch operations over the next five years

Diageo has announced plans to invest heavily in its Scotch whisky operations and has lined up the construction of another distillery in Scotland.

The company, which has seen the performance of its Scotch portfolio outperform the global market in recent years, said earlier today (6 June) that it will spend GBP1bn (US$1.55bn) on Scotch production over the next five years. A “major” new distillery is included in the plans, although the company could only pinpoint the Speyside or Highlands areas for the facility.

Existing distilleries will be expanded, while a further new site will be considered, “if global demand for Scotch is sustained at expected levels”. 

As well as the production spend, Diageo said it will construct “substantial new warehousing capacity” in which to age the additional liquid. Around 100 jobs will be created as a result of the investment.

“This is a pivotal moment in the development of the Scotch whisky category for Diageo,” said CEO Paul Walsh. “Over recent years our brands have achieved remarkable, sustained global growth. “We expect that success to continue, particularly in the high growth markets around the world.

“This builds on the foundations we have already laid down over recent years through sustained investment in both production assets and in maturing Scotch inventories.”

When contacted by just-drinks, a company spokesperson said: “The locations (for the new distillery) have yet to be finalised and Diageo is carrying out detailed investigative work at a number of potential locations in Speyside and the Highlands area. The first planning applications are expected to be lodged this summer.”

Diageo has invested heavily in Scotch recently. A year ago, the firm confirmed a GBP20m spend on upping capacity and, in 2010, it opened the Roseisle distillery at a cost of GBP40m.

The announcement comes a week after Pernod Ricard presented its plans to grow Scotch globally going forward.