WHYTE and Mackay has seen profits fall 54% following a drop in sales of cheaper whisky but noted the success of its efforts to sell more upmarket products.
The latest accounts for the Glasgow-based Whyte and Mackay Group show it made £13.8m pre tax profit in the year to March, compared with £29.5m in the preceding year.
Sales fell by 10 per cent, to £251.7m from £277.1m.
The accounts cover the last full year the group spent under the ownership of the United Spirits business developed by flamboyant Indian entrepreneur Vijay Mallya.
The company was bought by Emperador of the Philippines in May, in a £430m deal that completed in October.
In the strategic report included in the accounts, Whyte and Mackay said the fall in profits reflected a drop in sales that was due to the company doing less bulk business.
Distillers may sell Scotch in bulk to other producers for blending with different whiskies.
Once whisky has matured for three years in Scotland it can be shipped overseas for blending and bottling. There is a big market in India for bottling whisky with other drinks.
Single malts have to be bottled in Scotland.
Distillers also sell whisky for use in own-label products.
However, a spokesperson for Whyte & Mackay said the accounts reflect continued growth in its core brands.
The accounts say these include the Whyte and Mackay, Claymore and John Barr blends, the Dalmore and Isle of Jura malts, the liqueur Glayva and Vladivar vodka.
The spokesperson said: "Excluding bulk, underlying sales increased 10 per cent on the previous year and overall profit margin improved as expansion into international markets continued."
Whyte and Mackay noted in the accounts that excluding bulk sales earnings before interest, tax, depreciation and amortisation increased from 8.8 per cent in 2013 to 9.4 per cent in 2014. It said this reflected "continued premiumisation of the branded business".
The company added: "Strategic growth will be brands led but will be supported by private label and bulk business."
A range of spirits producers are following premiumisation strategies, which are partly intended to capitalise on the emergence of a new breed of affluent consumer in countries such as China and India. Many are said to buy premium western spirits brands to show they have arrived.
The premiumisation drive has been underway in the whisky trade for some time.
After buying Glenmorangie for £300m in 2004, France's LVMH set about reducing the share of bulks in the sales mix and focused on premium brands.
Announcing the deal to buy Whyte and Mackay in May, Emperador's boss Andrew Tan said: "Whyte and Mackay is a prized asset with excellent growth opportunity and its acquisition is in line with our plans to enhance our product portfolio."
He said whisky was the second fastest growing spirits segment in the world and the market was expected to expand rapidly in coming years.
Emperador's portfolio includes a top-selling brandy, which is sold under that name. The company distils and distributes alcoholic beverages around the Far East, but did not make whisky before buying Whyte and Mackay.
When the Whyte and Mackay deal completed on 31 October, Emperador said the Scots company was the fifth largest maker of Scotch in the world and owned some of the most iconic brands in the industry.
Emperador noted Whyte and Mackay had the capacity to produce 50 million litres of alcohol annually, with five distilleries and a bottling plant.
It said Whyte and Mackay holds one of the world's largest aged whisky inventories.
The accounts show Whyte and Mackay had whisky stocks valued at £111m at 31 March.
The average monthly number of people employed in the group in the year to 31 March was 476, including 297 in production.
The company was established by businessmen James Whyte and Charles Mackay in Glasgow in 1844.
United Spirits bought Whyte and Mackay in 2007 from its former chief executive Vivian Imerman for £595m in a deal which was supposed help expand the market for the brand in emerging economies such as India.
United Spirits sold Whyte and Mackay to Emperador after competition authorities expressed concern about Diageo's plans to acquire a controlling interest in the Indian business.
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