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Pernod Ricard ponders plans for distillery

Drinks giant Pernod Ricard will consider building a new distillery in Scotland if it sees demand continuing to rise after the re-opening of its last mothballed site at Glen Keith next year.

Christian Porta, chief executive of Pernod's Chivas Brothers arm, said production would restart at Glen Keith in Banffshire early next year after a 13-year hiatus.

It will be capable of producing six million litres of malt spirit, boosting Chivas's malt whisky production capacity by around 10% to 15%.

The French giant previously reopened Allt A'Bhainne in 2005 and Braeval in 2008. It also doubled capacity at Glenlivet.

"Once we have re-opened all the distilleries that have been open in the past we will have maximised capacity at our distilleries," Mr Porta said.

"If we believe the Scotch whisky industry and our volumes and sales will continue to grow, we will consider opening a new distillery."

The news comes just days after The Herald revealed arch rival Diageo is considering constructing a new distillery in the next couple of years to keep pace with growth in emerging markets.

Glen Keith was founded in 1957 and most of its spirit went into blends including Chivas Brothers' flagship Chivas Regal, although it also produced peated and unpeated single malts under brands including Glenisla and Craigduff.

Previous owner Seagrams closed Glen Keith in 1999 when whisky demand was hit by the Asian financial crisis.

Yet it is rising sales in Asia that is prompting the drinks giants to re-open and expand distilleries.

Mr Porta said: "Exports from the UK continue to grow very nicely. We are very confident that Scotch whisky demand will continue to increase."

Pernod last week reported "impressive growth" in sales of its whiskies, with Chivas Regal adding 13% in sales terms and 12% in volume in the half year to December 31, compared with the same period in 2010.

After the travails of the 1980s and 1990s, production has been steadily growing at Scottish distilleries.

The whisky industry produced 429 million litres of pure alcohol in 2010, up from 346 million litres in 2000, according to the Scotch Whisky Association.

Meanwhile, Pernod's chief executive Pierre Pringuet said he does not have a back-up plan in case of a disintegration of the euro.

"We don't have any plan in connection with the possible destruction of the euro, because we do not believe it will happen," he said. "My perception is that the public debt crisis is over."

Pernod also said it would look at acquisitions to bolster its expansion in emerging markets.

"We will certainly continue to participate in the consolidation of the industry and emerging markets are definitely a possible target for us," Mr Pringuet said.

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