SCOTCH whisky distiller Edrington has posted a 13 per cent drop in underlying annual pre-tax profits – hit by fierce competition in Taiwan and the UK.

Edrington’s latest annual report, published yesterday, shows it made pre-tax profits of £146.4m, excluding exceptional items, in the year to March 31. This was down from £168.7m in the prior 12 months.

The company, which is owned by a charitable trust, revealed The Macallan single malt had faced strong competition in Taiwan. And it pointed to intense competition for its Famous Grouse brand in the blended Scotch whisky market in the UK, particularly over the festive period.

The strength of the pound against the embattled Russian rouble and Brazilian real, and versus some European currencies, also weighed on Edrington’s profits.

Edrington cautioned that “uncertain political, economic, and trading conditions are likely to endure through 2016/17”.

However, the company, which employs about 850 of its 2,325-strong workforce in Scotland, emphasised its confidence in its medium and long-term prospects and highlighted its continuing investment.

While signalling exports had received a boost in the short term from the tumble in the pound following the UK electorate’s vote on June 23 to leave the European Union, Edrington warned the referendum result had created “a lot of uncertainty” in terms of overseas trade.

Gerry O’Donnell, corporate affairs director at Glasgow-based Edrington, said: “We are really looking for the freest market option for Edrington, and the industry. Access to markets is very, very important to us.”

He added: “It is a question now of resolving some of the issues, and getting some certainty…The quicker we can get some of those certainties, the better. The old cliche of ‘business likes certainty’ could never be more true about a subject than this one.”

Edrington’s revenues dipped slightly to £574.6m in the year to March 31, from £575.5m in the prior 12 months.

The remuneration of the highest-paid director, believed to be chief executive Ian Curle, fell to £1.1m in the year to March from £1.28m in the prior 12 months.

Asked about the competition faced by Edrington in the year to March, Mr O’Donnell replied: “If we take the UK market, when you have a market that is generally a bit tougher to get growth [in] our competitors look very aggressively for any growth they can get. The pricing in the UK Christmas market was ultra-aggressive this year.”

The company said The Famous Grouse, in spite of the reduced sales volumes resulting from the intense competitive pressure, had maintained its leading position in the Scottish and broader UK market.

Mr O’Donnell emphasised Edrington had in recent months seen an improvement in its performance in the UK market and “become more competitive”, highlighting the company’s spending on marketing.

Edrington was faced with strong competition in the Taiwanese single-malt market in the year to March, which dented The Macallan’s sales volumes and market share.

Mr O’Donnell said: “The Macallan is the price leader in the malt segment. It held its price premium in that market. There was a lot of competitive activity underneath the brand. For a period of time, we were out of kilter with the rest of the market.”

He added that Edrington was increasing its investment this year in Taiwan, spending more on advertising.

Mr O’Donnell also highlighted Edrington’s recent launch of The Macallan Double Cask in Taiwan, declaring the feedback from the trade and consumers had been “very strong”.

Edrington declared The Macallan had performed particularly strongly in China, the US and Russia. It noted The Macallan was “now the number one brand by value” in the single malt category in the US.

It added that its Highland Park single malt continued to show good momentum across its major markets in Europe, the US and Canada, delivering increased sales value.


Edrington reported that its Brugal rum had now returned to profit growth in its core markets of the Dominican Republic and Spain.

The Famous Grouse achieved growth in Spain and the US.

Edrington said its Snow Leopard Polish vodka had achieved growth in sales volumes during the year to March, with activity focused on cities in Asia and the US.

The company noted Cutty Sark had faced tough trading conditions in the blended Scotch sector.

Mr Curle’s remuneration in the year to March comprised a basic salary of £545,000, benefits of £160,000 that included a non-pensionable salary supplement in lieu of a company contribution to the pension scheme, and a £215,000 performance-related annual bonus. Mr Curle also received a £181,000 share award under a long-term incentive plan based on a three-year rolling performance target, which was achieved partially.

Commenting on the results for the year to March, Mr Curle said: “We have faced challenging economic and trading conditions with strong performances in key markets and shortfalls in others. In combination with the influence of currency, this has adversely affected our results.”

However, he added: “Recent investment in distribution is showing benefits with USA, global travel retail, and south-east Asia delivering double-figure [percentage] growth.”

Edrington said that, eliminating the effect of a reduction in unbranded sales and currency fluctuations, its underlying earnings before interest and tax were up by 0.9 per cent at £155.9m in the year to March.

The Robertson Trust, which owns the majority of Edrington, donated more than £18m to charitable causes in Scotland in the year to March.