Do you think that this will produce some stability in the business and a solid opposition to Diageo, or will lack of competition lead to underfunded distilleries producing below-par whisky?
http://www.nytimes.com/aponline/busines ... Talks.html?
Surely others distilleries are at risk because of the merger besides Imperial.
I wonder what exactly you mean when you write:
"Chivas/PR has a strategy to promote only The Glenlivet, to become a major world player."
Does this mean that the only malt that will get major commercial and advertising support in that new group will be The Glenlivet? What about production issues? I do think there is potential in the brand, god knows its a already a major powerhouse here in the US.
I understand that Aberlour doesn't really have the profile' this is a good thing come to think of it. For with increased production comes a drastic reduction in standards and overall quality. Just look at the disaster the Edrington Group has wrought on the Macallan...
I surmise that drop in quality (at any distillery) comes from bottling barrels that would not previously have been considered suitable for single malts, due to high demand and low supply. Increased production is a parallel consequence, not a cause, in my theory.
I wasn't aware of PR's history of closures. Jackson indicates that PR bought out Chivas in 2001--are these closures only since then? If so, that bodes ill.
There were reported Pernod plans to reopen at least one of the mothballed distillieries to meet rising demand, but with news today of the merger with Allied, that may change?
In today's Le Monde it is written that Pernod Ricard will sell off previous Allied assets to Fortune brnads.
Among them, Laphroaig and Maker's Mark.
Old Potrero: A Real Rye --for a change!
There is at the moment no need to be afraid that the future of the single malts is about to get pear shaped!
If mergers do happen I bet this is the "best" time for it to occur as the increasing interest in our lovely malts creates a greater demand. Now, if Pernod doesn't want to be bothered with some of the lesser distilleries I bet they'll sell them off to someone who want's to exploit this growing niche. Isn't this era - our new millenium a good time for reopening mothballed distilleries and selling off distilleries to independant bottlers and smaller enthusiast companies? The lucky ones to buy a distillery or two will most certainly take over at least some of the stored casks and still working equipment. They'll at the same time enter a market which doesn't reject the idea of younger whiskies - thus enabling them to capitalise on their investment earlier than what used to be the fact. And, if they can afford the investment they will get their money back in the end as there is no sign at all that the single malt market will decrease.
Diageo mixes it in battle for Allied Domecq
DIAGEO, the world’s biggest drinks company, was today understood to have entered the multi-billion pound battle to land smaller rival Allied Domecq, maker of Ballantine’s, Beefeater gin and Malibu.
The company, which has extensive operations throughout Scotland, is understood to be seeking to join a consortium - possibly including Bacardi. France’s Pernod Ricard and Fortune Brands of the US have already had a £7.4bn bid recommended by Allied’s board, while a consortium led by the US groups Constellation Brands and Brown-Forman has also now confirmed its interest.
Diageo has declined to comment on its intentions. Earlier this year Diageo’s chief executive Paul Walsh ruled out a solo bid for Allied, saying he was only interested in brands that became "dislocated" by any takeover of Allied.
But any move by Diageo could struggle to get past regulators, as it would effectively mean the world’s biggest drinks group buying the second-biggest player in the market.
I heard news today, that Pernod Ricard will reopen mothballed Allt-a-Bhainne to meet rising demand of the blended Chivas Regal. No idea what this might mean in the current cliffhanger situation.Iain wrote:There were reported Pernod plans to reopen at least one of the mothballed distillieries to meet rising demand, but with news today of the merger with Allied, that may change?
This is good news! The statement also says:
Chivas Brothers, the Scotch whisky business of Pernod Ricard, has announced that Allt a’Bhainne distillery has re-opened for production as world-wide demand for the company’s premium malt and blended Scotch whiskies continues to increase. Chivas Brothers reported double digit growth world-wide in 2004 across its portfolio.
Christian Porta, Chairman and CEO of Chivas Brothers said: “The expanded production capacity offered by Allt a’Bhainne further supports our commitment to achieving our long-term objective to be the global leader in premium Scotch whisky.”
Does this suggest that it will produce both for blending and single malt purposes? I hope so!
Clearly this isn't the time to mothball more distilleries as the popularity increases and new markets open up.
I couldn't find a link at the official site but here's from a danish (and respectable) site:
http://www.whiskynyt.dk/modules.php?op= ... =0&thold=0
Ok - I didn't know. But that doesn't nessecarily mean anything as there are several distilleries without own storage fasilities - such as Caol Ila. Chivas Brothers should have plenty room for a few casks. If I'm not mistaken - wasn't Linkwood a "blending distillery" before it was sold off?
I'm not sure all OB CI casks are stored on site. According to Andrew Jefford (in Peat, Smoke and Spirit), the amount of CI casks is 3000 and falling. On the other hand the amount of Lagavulin casks is 2000 and rising.
It seems that Diageo has the smallest warehouse capacity on Islay: 5000 at CI, 7000 each at Lagavulin and Port Ellen.
For the two Islay distilleries having the highest production, they just have to tanker most of it away.
And given that they have enormous warehouse capacity on mainland Scotland, I figure that makes sense for them to do so. They even abandonned their warehouses in Campbeltown
According to same book, their cask policy now is, that it makes no difference where the spirit is maturing. Well it would be - wouldn't it
Some people can find salt and sea-air in the nose of CI. Wonder where the sea-air is coming from
http://business.scotsman.com/topics.cfm ... =558932005
Scotland on Sunday 22/05/2005
Whyte and Mackay eyes up Allied drinks cabinet
WHYTE and Mackay is interested in picking up any whisky brands that may be offloaded as a result of the bidding war for Allied Domecq.
John Vincent, strategy director for Whyte and Mackay, said last week that the company had the firepower and support of Bank of Scotland to move into the market.
Vivian Imerman, chairman and chief executive, is keeping a keen eye on developments in the Allied battle after stating last year that he wanted the company to grow the malts side of the business. It is thought that when the Allied deal is completed, some brands may be surplus to requirements.
Allied will this week send its shareholders details relating to Pernod's recommended offer of 670p per share, of which 20% is in Pernod shares, that values the group at £7.4bn.
However, there is the possibility of a rival cash bid worth about 700p a share from Constellation Brands of America in conjunction with Brown-Forman, which has just appointed a public relations firm to handle its interest.
Allied's £400m pension deficit could deter Constellation and there are doubts over whether the company can raise the finance.
But Constellation's all-cash offer might sway Allied shareholders, some of whom may not want to accept Pernod shares.
Diageo, the world's biggest spirits company, is unable to bid alone but is thought to be in talks with Bacardi about setting up a third consortium.
Paul Walsh, Diageo's chief executive, is said to have identified some of Allied's wines and Tia Maria liqueur as favoured targets. The City now believes the bidding war will push the price above 700p a share.
Vincent said the revitalised Whyte and Mackay, itself the subject of two changes of ownership since 2001, was keen to promote some of its existing brands as "luxury goods".
http://business.scotsman.com/agricultur ... =574712005
The Scotsman 26/05/2005
Domecq rival told: put up or shut up
THE City's Takeover Panel has set a 29 June deadline for a consortium headed by Constellation Brands of the United States to make a rival offer for Britain's Allied Domecq, the second-biggest spirits company in the world.
The panel's "put up or shut up" ruling came as Allied issued the offer document for its takeover by French group Pernod that Constellation, backed by Brown-Forman of the US and two private-equity groups, is trying to gatecrash.
Pressure may have mounted on the panel to force the issue with Constellation by disruption caused to Allied amid the current bid uncertainty.
In a trading update yesterday, Allied flagged a "change in behaviour" among its customers and suppliers since the announcement last month of the Pernod deal and the subsequent approach by Constellation, the world's biggest wine company.
Competitors were also believed to be attempting to grab market share while Allied was distracted by the takeover, through targeted price-cutting and promotions.
Allied said it had taken action to support its business and its expectations of earnings growth in the high single-digits remained unchanged.
But Allied added: "While these indications are encouraging, the unavoidable disruption caused by the [Pernod] offer and the approach from the consortium may yet have a short-term impact on the performance of the business."
Brown-Forman, which put out its own latest trading results yesterday, was asked about Allied's comments on disruption to its trading.
Owsley Brown, chairman and chief executive of Brown-Forman, said: "I would ask them [Allied] about that, frankly. They would be much closer to that." Brown said he was "very constrained in what we can say" about the takeover situation given Takeover Panel rules, but added: "We are working hard to explore all our options with our partners."
The panel said Constellation must decide whether to issue a firm intention to bid by 5pm on 29 June or to say it will not proceed and not make an approach for six months.
A source close to Constellation, said yesterday: "We have enough time to put together a viable bid."
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