UK: Drambuie teams up with Morrison Bowmore, finances remain strong
Drambuie is to link up with whisky distiller Morrison Bowmore in Scotland, as group CEO Phil Parnell tells just-drinks that the group is in good financial shape to weather the recession.
The Scotch whisky liqueur group said today (27 March) that it has signed a deal with Morrison Bowmore to cover whisky procurement, blending and bottling, as well as storage and distribution.
Current Drambuie partner Glenmorangie last year signalled its intention to cease all third party business by summer 2010.
Drambuie's deal with Morrison Bowmore is set to begin early next year and will be centred at the distiller's Springburn facility near Glasgow.
Phil Parnell, Drambuie CEO, said: "We and Morrison Bowmore are of similar size, we share the same philosophy of premium brands, with an emphasis on the highest quality of product and packaging and we see great scope for synergy between our two companies."
Parnell told just-drinks today that Drambuie "will see some volume erosion this year" as a result of the recession enveloping two of its key markets, the UK and US.
He said this would be partly caused by a general consumer slowdown, but also by uncertainty through the supply chain. "This cash crisis means that everybody is looking to conserve liquidity. Everybody is trying to cut back on their stock levels."
He added: "This is hitting everybody and we are no less susceptible than everyone else."
Parnell said that Drambuie intends to take advantage of lower media rates in the economic downturn, something several other drinks firms, including Diageo, have also spoken of. "We will continue investing in marketing at the same level as we have in the past," said Parnell.
Drambuie, he said, has entered the downturn in relatively strong financial shape, after paying down its bank debt. "We are not in any way, shape or form dependent on the banks," he said.
Drambuie operating profit rose by 31% to GBP3.2m (US$5.6M) for the 12 months ended 30 June, while revenue increased from GBP20.8m the year before to more than GBP21m, the private company announced last October.
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