Rum deal helps whisky group to strong sales and profit growth

Edrington sees premium spirit markets holding up despite effects of global downturn

By David Telfer

Published:

Ian Curle: confident

MIXING IT UP: Andy Gemmel, left, and Wayne Collins, of Stirling-based Maxxium UK – a joint venture between Edrington and Beam Global – go through their whisky cocktail-making paces in a multimillion-pound on-trade education programme for 25,000 bartenders

Whisky distiller Edrington Group has reported strong growth in sales and profits for the year to March 31, with its acquisition of a 61% stake in Dominican rum producer Brugal accounting for a substantial part of the growth.

Chief executive Ian Curle said yesterday the growth was despite a softening of demand in some of Edrington’s main markets because of the global economic slowdown.

He said: “While this will affect our growth ambitions in the short to medium term, we remain confident about our long-term prospects.”

Mr Curle said the trading environment changed significantly over the second six months of the year as the effects of the downturn affected both consumers and trade in many key markets.

He added: “During this period we have experienced trade destocking in a number of markets as wholesalers and retailers seek to reduce their working capital and debtor exposure.

“Consumers are also changing consumption patterns with a clear shift to the off-premise as they become more value conscious. While this makes for a tough trading environment, we remain confident about the prospects for premium spirit brands, and in particular our portfolio of premium Scotch whiskies and rum.”

The privately owned group noted a strong performance from its core whisky brands, which include The Macallan and Highland Park single malts and The Famous Grouse blend – now the number one blend in the UK after having been the top choice in Scotland for 29 years.

Edrington said Brugal golden rum had added a new and exciting dimension to its portfolio as the leading spirit brand in the Dominican Republic with a market share of more than 80%, and showing good growth in Spain despite a significant slowdown in the Spanish economy.

Glasgow-based Edrington has reported group turnover up 44% on the year before at £419.9million and pre-tax profits excluding exceptional items up 30.5% to £94.8million. The figures include Brugal’s trading results for the first time.

Edrington’s annual accounts for the year show that its unnamed highest-paid director, thought to be Mr Curle, received emoluments, benefits and performance-related payments amounting to £677,000, compared with £839,000 the year before, when his performance-related payments were almost £300,000 higher.