Diageo announces plans to invest £1bn in whisky production

Posted on 6 Jun 2012 by Chris Flynn

Diageo will invest £1bn in expanding and constructing distilleries to meet the global demand for Scotch whisky.

The drinks giant says the investment will spread over five years involving the expansion of existing distilleries and the construction of a new distillery in Speyside or the Highlands.

The millions of litres of additional Scotch whisky produced will need a greater warehousing capacity which the investment will also finance.

If global demand for Scotch whisky is sustained at expected levels then plans for a second new distillery will be drawn up, Diageo says.

The company reports that its Scotch brands, including Johnnie Walker and Bells, have grown by 50% in recent years.

The investment reflects a booming wider industry, where demand for whisky globally – especially single malt whisky in emerging markets – remained high through the recession and into 2011 and 2012.

Campbell Evans, director of government and consumer affairs at the Scotch Whisky Association, said: “The continuing and expanding investment in distilleries and extra warehousing shows confidence in the long term future for Scotch whisky sales globally.

“Companies across the industry are investing to meet this growing demand and to build on last year’s record exports of £4.23bn, equivalent to £134 a second.”

Over the five-year period, Diageo says that 1,250 jobs will be created in construction with 500 jobs generated in the wider economy. Diageo will also create over 100 full-time positions in rural areas of Scotland.

The company currently employs more than 4,000 people in Scotland and has a total of 28 malt distilleries.

Diageo chief executive Paul Walsh said in a press statement: “Scotch whisky is a significant manufacturing export industry in the United Kingdom, driving domestic investment and job creation through our success in exporting to high growth markets around the world.”