THE owner of Glengoyne and Tamdhu single malt producer Ian Macleod Distillers has highlighted his confidence that the "golden era for Scotch" has not come to an end just because the industry's overall exports fell last year.
Leonard Russell, who is managing director of Ian Macleod and owns the independent West Lothian-based distiller with his family, underlined the potential of markets such as India, China, and Africa over the long term after his firm posted accounts showing a hike in profits. He noted the growing "middle class" in these emerging Scotch whisky markets, and offered his view that people who could afford scooters and televisions would also be able to buy a bottle of Scotch whisky.
Accounts which have just become available from Companies House show pre-tax profits at Ian Macleod Distillers climbed to £8.56 million in the year to September 30, 2014, from £5.95m in the prior 12 months.
Mr Russell attributed the rise in profits at Ian Macleod Distillers, which counts Taiwan, Germany, France, the Netherlands and Belgium among its major markets, to heavy long-term investment in the Glengoyne and Tamdhu distilleries.
"Single malt is really what is driving our growth at the moment," he said.
Figures published last week by the Scotch Whisky Association (SWA) showed the overall value of Scotch whisky exports in 2014, at £3.95 billion, was down seven per cent on the previous year. And 2014 is the second consecutive year to see a decline, although the value of Scotch exports in 2013, at £4.26bn, was down only about £14 million, or 0.3 per cent, from the record £4.27bn achieved in 2012.
The SWA figures showed a three per cent decline in the volume of Scotch whisky exports in 2014, to 1.19 billion, 70-centilitre bottles.
Mr Russell said: "Recently, the Scotch Whisky Association revealed figures about shipments for [2014] being down by seven per cent in value and three per cent in volume. I don't really regard that as a long-term trend. It is just Scotch, and especially single malts, have grown so much in the last few years."
Citing his belief that the fall in the industry's exports merely reflected "a little bit of destocking" by wholesalers, Mr Russell added: "I don't view it as the end of the golden era for Scotch.
"If someone can afford a scooter and a television, they can afford a bottle of Scotch. The number of additional people worldwide who can afford a scooter and a television is growing quite significantly."
Ian Macleod Distillers, which employed an average of 101 people in its last financial year and also counts Islay single malt Smokehead and blended Scotch whisky King Robert II among its brands, achieved its jump in profits in the year to September 30 even though group turnover dipped by 1.5 per cent to £52.1m.
It attributed the fall in turnover to fewer bulk trades of mature whisky.
Mr Russell noted that bulk trading in the industry comprises sales to other companies within the Scotch industry and sales of whisky bottled overseas rather than in the UK.
He said: "Most whisky companies have both bottled and bulk. As a company, we sell less bulk than our industry peers. We sell more stuff in bottles."
Highlighting the fact that profit margins had increased as a result of sales of single malt Scotch whisky making up a greater proportion of Ian Macleod Distillers' overall turnover, Mr Russell added: "The reason for our growth in profitability is we are in the business for the long term.
"We are not a quoted company. We don't tend to work on short-term plans. We think more long term. We invested in our main distilleries [Glengoyne and Tamdhu] in the past. We are really just seeing the result of that investment."
He also highlighted his belief that independents such as Ian Macleod Distillers could compete with the big players in the single-malt Scotch market because consumers around the world could easily find out about where the whisky was produced through the internet.
Asked about turnover in the current financial year to September 2015, Mr Russell replied: "We are tracking well so far this year. We are six months through."
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