The Scotch whisky producer Edrington, best known for The Famous Grouse and The Macallan, has signed a major agreement to supply a new range of Scotch whisky to South Korea, the world's largest market for deluxe Scotch.

The long-term partnership with Hite Group, South Korea's leading alcoholic beverage distribution company, is designed to capture a major share of a market, which has tripled in size to 37m bottles in the last 12 years.

Edrington is already producing a new range of premium and super premium Scotch whiskies under the brand name Lancelot, being released onto the South Korean market tomorrow. The privately-owned group will spend £3m to develop new capacity at its bottling plant at Great Western Road, Glasgow to meet anticipated demand.

Edrington will be responsible for blending, bottling and delivery of the cased goods while Seoul-based Hite, which employs 2000 people and has a turnover of US$2 billion, will handle marketing and distribution through its strong local distribution network.

Edrington and Hite have agreed to produce a variety of different age variants, ranging from 12- to 30-years-old, which will be sold in high-end establishments, where such bottles can cost up to £200 each.

Announcing the news, Ian Good, chairman and chief executive of Edrington, said:" South Korea remains the world's most dynamic and promising market for deluxe and premium Scotch: whisky volumes rose by nearly 20 per cent in 2001. We intend to capture a major slice of that business and this deal will allow us to make significant headway in a market which the group had identified as a key growth area.

"We foresee continuing strong growth for the Scotch whisky sector in South Korea. Hite is the perfect partner to assist Edrington to develop a significant market share - it too is an independent company with a like-minded attitude towards business relationships".