UK: Diageo delays capacity expansion for Scotch whisky because of declining sales

Diageo has delayed plans to expand production capacity for Scotch whisky after the world’s thirst for the drink started to drop this year, OffLicence News reported on October 30.

Scotch exports dropped 11% in the first half of 2014 as the Scotch Whisky Association blamed “economic headwinds and uncertainty” for hampered growth in several markets.

Diageo, the world’s leading producer, announced in 2012 it would invest more than £1 billion over five years to keep up with rising global demand.

But now that demand is cooling off Diageo, which supplies Johnnie Walker, J&B, Talisker, Bell’s and the David Beckham-fronted Haig Club, has decided to delay expansion plans.

“The weaker global economic environment has impacted the growth of Scotch in certain markets and therefore Diageo will continue to review and adjust the timing of the next phase of our investment programme to manage our Scotch whisky inventory and to retain the alignment between growth in production volumes and growth in demand,” a Diageo spokesman said.

31 October, 2014