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Overseas sales boost profits at whisky firm

ISLE of Arran Distillers has enjoyed a 39% increase in its profits and hit record production levels as it moves to lay down enough stock to continue benefiting from the booming global trade in Scotch whisky.

BARRELLING AHEAD: Euan MItchell said Asia, particularly Taiwan and Vietnam, was a growth focus. Picture: Bill Mackintosh
BARRELLING AHEAD: Euan MItchell said Asia, particularly Taiwan and Vietnam, was a growth focus. Picture: Bill Mackintosh

Accounts to be filed at Companies House will show the business recording an 18% rise in turnover from £3.1 million to £3.65m thanks to growing sales in Asia, North America and Europe.

Pre-tax profit has come in at £348,514 in 2012, up from the £250,006 posted the previous year.

Managing director Euan Mitchell said agreements with new distributors in the US and Denmark were among the reasons for the sales boost.

He said: "We have always done well in Canada but are now seeing a greater impact in the US.

"France is still our biggest market and we also do well in Germany, Holland, Belgium and Russia. We got a new importer in Denmark and they have really got behind the brand and sales are flying.

"We are starting to get established in China and have an importer in Beijing and are in some of the tier one cities. We are getting into the whisky bars and doing tastings for the clubs across there."

Mr Mitchell said Asia is a focus of growth for 2013, with Taiwan and Vietnam among the countries the business is keen to grow in.

The company's portfolio includes the Robert Burns single malt, Arran 14-year-old single malt and the Lochranza blend.

Mr Mitchell said: "Taiwan is perhaps the most important malt market in Asia just now, and in Vietnam there is a growing aspirational middle class that want to drink [Scotch] whisky."

Production levels at the island distillery were more than 400,000 litres of pure alcohol, while a warehouse which opened last year has space to mature 12,000 casks.

Mr Mitchell said there was still spare capacity as the current facilities can manage 600,000 litres of production annually.

He said: "Forecasting is always difficult as with a malt it is a minimum of seven years and more like 10 but we have been steadily increasing production since 2010."

At the end of 2012, the value of malt whisky stock had risen from £5.1m to £6.1m, while bottled stock increased from £455,735 to £539,141.

During the year, the drinks firm, which has its headquarters in Stirling but produces whisky from a site in a glen at the north of Arran overlooking the village of Lochranza, also refurbished its visitor centre and cafe at the distillery.

Mr Mitchell admitted he is unsure if the island and the company will see any spin offs from the expected tourism uplift from the Ryder Cup and Commonwealth Games in 2014.

He said: "You never know what it might bring. With the Ryder Cup, there might be some golfers who would want to tick off some of the courses in Ayrshire and then we are only a short distance away.

"There are seven courses on the island as well and people may want to do the tourist thing and visit a distillery as well."

Trading in 2013 was said to be progressing well, with plans to establish the Arran brands in South America and India in the long term also starting to take shape.

Mr Mitchell added: "In South America we have sent some cases to Panama and had conversations with distributors in Brazil and the malt whisky society in Argentina.

"We know some companies do quite well in Uruguay so we know there is a market in South America.

"India is on the radar and some people in the industry think it has more long term potential than China as there is more of a brown spirits tradition.

"The challenge will be getting them off the local hooch."

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