Scotch whisky sector 'historic moment' as major deal done

The Herald Scotland

07-07-2025

This deal was first announced back in September 2024.
While this is more than nine months ago, the timeframe over which the transaction was finalised is relatively insignificant in the context of how long these two heavyweight distillers have been around. And completion of the deal was probably, if anything, faster than some might have expected.
Last week's completion of the deal, to which the Competition and Markets Authority gave the green light in early March, gave Edrington and William Grant & Sons another opportunity to flag the strategic rationale from each of their perspectives.
William Grant & Sons talked about an evolution of The Famous Grouse 'into a true global icon'. Edrington, flagging the success of The Macallan single malt in which it has invested very heavily in recent years, highlighted its focus on ultra-premium spirits.
Two decades ago, it would probably have been almost inconceivable that Edrington would choose to sell The Famous Grouse blended Scotch whisky, a brand famous for its quirky television adverts and at that time the shirt sponsor for the Scotland national rugby union team.
However, in recent years, the prominence of The Famous Grouse in Edrington's results statements had diminished as the group, which also owns Highland Park and The Glenrothes, focused ever more on the successes achieved with its single malts and notably on The Macallan.
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That meant, by the time the sale of The Famous Grouse was announced last September, it was not a huge surprise even if it was obviously a very major development in a sector that is so important to the Scottish economy and to the exports of both Scotland and the UK as a whole.
William Grant & Sons, when the deal was completed last Tuesday, hailed the acquisition as a 'historic moment' for it.
This is a company that was founded in 1887, at Dufftown in Speyside, so there is surely a high bar to what constitutes 'historic' for it. The distiller, which owns the Glenfiddich single malt, declared the completion of The Famous Grouse and Naked Malt deal 'demonstrates the company's commitment to the global Scotch whisky category and confidence in the future of the wider spirits industry'.
William Grant & Sons, which also produces Hendrick's gin and has a major operation at Girvan in Ayrshire, added: 'The Famous Grouse is Scotland's best-selling whisky and one of the top-selling Scotch whisky brands worldwide, renowned for its quality and heritage.'
Søren Hagh, chief executive officer of William Grant & Sons, said he was 'delighted to complete this acquisition and welcome The Famous Grouse into our portfolio'.
He described it as 'a remarkable Scottish brand with rich history and a strong market position in a number of countries'.
Mr Hagh added: 'Over the coming years, we will build on this strong foundation and work to evolve the brand into a true global icon. We also see a lot of potential in Naked Malt, which will be a great addition to our portfolio. Together, these brands perfectly complement our vision for growth, and we look forward to investing in their future and sharing their stories with whisky lovers around the world.'
For his part, Edrington chief executive Scott McCroskie declared: 'Our focus on ultra-premium spirits has driven Edrington's growth in recent years and we have continued to execute our strategy despite the hostile trading environment. This includes further strategic investments in our sherry cask supply chain and in reducing our carbon footprint.'
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He made these comments as Edrington reported a sharp fall in profits for the year to March.
However, it is crucial to put this in context. The Scotch whisky sector has faced much tougher trading conditions in some key export markets of late.
And we must not lose sight of Edrington's stellar growth over a long period.
Furthermore, Edrington was able to report last week that The Macallan had 'marked a successful 200th anniversary year and recorded its second-highest year ever for sales, reinforcing its position as the world's number one single malt Scotch whisky by value'.
The Glasgow-based distiller flagged The Macallan's strength in the Japanese and South Korean markets.
And, providing crucial medium-term context, it highlighted the fact that its 'core contribution' measure of profits in the year to March 31 was, in spite of a 28% fall during the period, still 38% ahead of pre-pandemic levels, at £291.4m.
Scotch whisky is of course, as William Grant & Sons and Edrington know fine well, a long-term business.
Edrington's principal shareholder is The Robertson Trust, which has donated £396m to charitable causes in Scotland since 1961.
William Grant & Sons, like Edrington, has also been able to make sizeable charitable contributions over a long period of time.
During 2023 alone, the family-led William Grant Foundation awarded a record total of more than £4.7m in new grants to 114 charitable organisations.
Both Edrington and William Grant & Sons make crucial contributions to Scotland's economy and provide a great deal of valuable employment.
Hopefully, both will continue to prosper over the years and decades ahead as they navigate boom times and tougher periods in international markets as they always have, never losing a long-term perspective that is supported and enabled by their private ownership.