Sunday, October 29, 2017

Glenallachie has a new owner

Just about two years ago I wrote a post where I detailed the ownership of every Scottish malt distillery that was currently in operating at the time and had been producing spirit for at least three years. New distillery projects are pretty hard to keep track of and many of them never come to fruition, so if I ever decide to add newer distilleries to this list it will likely be in a separate post a few more years down the road. But I would like to keep the list up to date as far as ownership changes among the distilleries that are already on the list. When changes are made to that original post, I make a note of the edit in the comment section and write a corresponding post with the details of the transaction.

Over the last 25 years, as the industry recovered from the downturn of the 1980’s, there have been many malt distilleries in Scotland that have been rescued and / or resurrected by new owners; Benromach by Gordon and MacPhail in 1993, Ardbeg by the family that owned Glenmorangie in 1997, Edradour by Andrew Symington in 2002 and Glengyle by J&A Mitchell & Co in 2004, just to name a few.

Bruichladdich is one of the great success stories of rescued distilleries in the modern era. Mark Reynier (along with his group of investors) was its savior in December of 2000. Less than 12 years later the Board of Directors accepted an offer for the distillery from Remy Cointreau. Shortly after that, Mr. Reynier was relieved of his duties as managing director. At that point there was much speculation about what his next move would be. Flush with cash from the sale, many believed it was inevitable that he would find another neglected Scottish malt distillery to buy and bring back from the brink.

That was not to be the case though. Apparently Mr. Reynier felt that the asking prices were too high for all of Scotland’s under-utilized distilleries, and that bargains like his previous deal were a thing of the past. Instead, he chose to take his financial resources and a new group of investors to Ireland in 2014, where he transformed a former Guinness brewing facility into a malt distillery. Production commenced in January of 2016; time will tell if Irish single malt whiskey becomes the next big thing.

I last updated the list of distillery owners about 10 months ago, to reflect Brown-Forman’s mid-2016 purchase of the BenRiach Distillery Company (which included three distilleries; BenRiach, GlenDronach and Glenglassaugh) from Billy Walker and his business partners. I detailed that sale in this post, with plenty of information about all of the involved parties.

The quick version of the story is that Walker acquired BenRiach in 2004, GlenDronach in 2008 and Glenglassaugh in 2013. The BenRiach and GlenDronach brands were deftly built up using existing whisky stocks. Glenglassaugh would be a bit more of a challenge to revive though, having recently come off of a 22 year closure. With a few special bottlings from the limited existing stocks, well-marketed younger bottlings and a dramatic increase in production, that distillery had at least been set on a course for success by the time of the 2016 sale to Brown-Forman.

With a hefty profit from the sale of the company that he had cultivated, Billy Walker has now done what many people thought Mark Reynier would have done in the years following the sale of Bruichladdich. Immediately after selling to Brown-Forman, Walker stayed on in the role of master blender. It was announced in February of 2017 that he would be stepping down from that role and parting ways with his former company after a few months of assisting with the transition to his replacement.

That transition was complete by June 12th, and just a month later came the announcement that Walker had purchased the Glenallachie distillery from Chivas Brothers / Pernod Ricard. Glenallachie is one of the post-World War II boom period distilleries, having been established in 1967. The name might not ring a bell for most people; it didn’t for me. That’s because the distillery’s output has been focused almost exclusively on supplying various blended Scotch whiskies throughout its history. Some Glenallachie has been bottled as single malt; a 12 year old was available in the past and more recently it was part of Chivas Brothers’ Cask Strength series. While the whisky from this central Speyside distillery has a good reputation, it has simply never been seriously promoted as a single malt.

When Invergordon acquired Glenallachie in 1985, production was limited and then ceased in 1987. Pernod Ricard purchased the distillery in 1989 through their subsidiary, Campbell Distillers (which became part of Chivas Brothers when they were acquired by Pernod Ricard in 2001). The distillery was brought back to life and production was doubled with the addition of a second set of stills in 1989.

The sale of Glenallachie to Walker includes exiting stocks of whiskey, which should be plentiful considering the production history, and two blended whisky brands, MacNair’s and White Heather. These brands have seen very little use in recent years and are practically unknown. It will be interesting to see what kind of magic Mr. Walker can work this time around.

There’s an interesting footnote with which to finish this post. Glenallachie is not the first distillery that Billy Walker has purchased from Pernod Ricard; BenRiach and GlenDronach were both part of the French conglomerate’s portfolio before Mr. Walker acquired them. This might lead one to assume that Pernod Ricard is shrinking its footprint in the Scotch whisky industry, but a look at the numbers shows that not to be the case. BenRiach, GlenDronach and Glenallachie have production capacities of 2.0 million, 1.4 million and 3.9 million liters per annum, respectively. However, in 2009, Pernod Ricard’s Glenlivet distillery expanded from 6.0 to 10.5 mlpa and in 2014 they opened a new distillery, Dalmunich, which has a capacity of 10.0 mlpa (this distillery was too new to make it onto the list I compiled in 2015). They’ve likely expanded capacity at other distilleries as well, but just taking these five facilities into consideration leaves the company with a net gain of 7.2 million liters of spirit per annum.

No comments: