By Scott Wright
GORDON & MacPhail, the historic Scotch whisky blender and distiller, is savouring a “double win” in the key US market as new figures reveal that it increased sales and profits against the backdrop of the pandemic in its most recent financial year.
Ewen Mackintosh, managing director of the Elgin-based company, said the five-year suspension of tariffs on single malts in the US and the end to the requirement for Scotch distillers to export to America in 75cl bottles will boost its prospects in the industry’s biggest overseas market.
Mr Mackintosh was commenting as Speymalt Whisky Distributors Ltd, which trades as Gordon & MacPhail, reported a pre-tax profit of £13.9 million for the year to the end of February, up from £9.8m. Total sales increased by one per cent to £34.1m.
Mr Mackintosh told The Herald the results signal there is “light at the end of the tunnel” following the challenges brought by the pandemic, which saw its UK wholesale operation “almost switch off overnight” when the country moved into lockdown last year.
Sales in specialist whisky shops located at tourism destinations were “heavily impacted” during the period, offset by revenue generated through customers with a good online presence and sales in international markets, which increased by 5% to £13.8m. The Far East and Europe remained strong markets for the company.
Gordon & MacPhail began life as a grocery business in Speyside, and earned renown for its skill in blending the many single malt whiskies distilled in the region. It became a whisky producer in its own right when it acquired the Benromach Distillery on the edge of Forres in 1993, and is now in the midst of building a second distillery, The Cairn, in Grantown-on-Spey.
Mr Mackintosh said: “The global demand for single malts has remained strong right the way through [the pandemic], and the ethos/ philosophy of drinking less but drinking better certainly fits into our portfolio. We have seen that both for Benromach and G&M. It has been a strong performance.”
Looking forward, Mr Mackintosh said G&M has made a “really strong start” to its current financial year, helped by the reopening of the tourism sector, which has seen foreign visitors gradually begin to return to Scotland.
And he underlined his hopes for the US market following two key events of recent months: the suspension of import tariffs on single malt whisky in March, which has been blamed for a huge slump in Scotch exports since their introduction in October 2019, and the end of the requirement to sell whisky in the US in 75cl bottles. Scotch whisky is usually packaged in 70cl bottles.
Mr Mackintosh said: “It is almost a double win for us… as we look to build back up [from the pandemic]. We have got rid of the tariffs, and in terms of logistics it makes it a much easier market for us to deal with, because we can just take in standard products. We don’t have to create this separate bottle size for the US market.
“We can look forward to the US being a bigger and strong market for us in in future.”
Asked to comment on the well-documented supply chain issues currently affecting the industry, which include a shortage of dry goods such as glass and cardboard, Mr Mackintosh said the company was “working hard to mitigate” the challenges. He said it was buying in more goods “to give ourselves a bit more [of a] buffer” and “working really hard with our distributors to ensure that if there are going to be delays, we pull that into order and delivery times”.
He said: “If Covid has taught us anything, [it is] you just have to work a little bit harder at planning. You can’t control everything.”
Mr Mackintosh said work on its new distillery, The Cairn, was proceeding on schedule. G&M plans to begin commissioning its stills in the next couple of months before its visitor centre opens in the summer of 2022.
G&M currently employs around 135 people. Ten people were made redundant as a result of the repositioning of its traditional whisky shop with grocery store and deli in Elgin. The outlet is now focused exclusively on fine wines and spirits.
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