The Macallan Scotch whisky owner flags 'hostile' environment

The Herald Scotland

2 days ago

And Edrington highlighted the fact 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.
Edrington, which this week completed the sale of The Famous Grouse and Naked Malt brands to William Grant & Sons, reported a 26% fall in pre-tax profits before exceptional items to £274.4m for the year to March 31.
Core revenue fell by 10% to £912m, with the group flagging a 'challenging economic environment' and reduced consumer demand in international markets.
Edrington said: 'After a period of industry-leading growth, during which the business has grown significantly, this has been a period in which Edrington experienced the full-year impact of reduced consumer demand.'
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The Scotch Whisky Association reported in February that the overall value of Scotch exports fell by 3.7% to £5.4 billion in 2024. And it observed then that global trading conditions remained 'turbulent' at the beginning of 2025.
Edrington said today: 'The decline in sales was broadly consistent across international markets, with exceptions including a resilient performance by Brugal rum in the Dominican Republic and The Macallan in South Korea and Japan. The Macallan 12, 15 and 18-year-old expressions continued to grow in China and the company saw high consumer demand for products launched to celebrate The Macallan's 200th anniversary.'
Edrington flagged increased production and employment costs in the context of the 28% fall in core contribution to £291.4m in the year to March 31.
Core contribution is defined by Edrington as profits from its branded sales and distribution after the deduction of overheads on a constant-currency basis.
Edrington, which also owns The Glenrothes single malt, observed: 'Core contribution was 38% ahead of pre-pandemic levels.'
Scott McCroskie, chief executive of Edrington, said: 'After several years of unprecedented growth for premium spirits and industry-leading results posted by Edrington, the business felt the full effect of the global economic downturn during the year.
'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.'
Edrington's principal shareholder is The Robertson Trust, which has donated £396m to charitable causes in Scotland since 1961.
Noting Edrington's completion of its sale of The Famous Grouse and Naked Malt brands to William Grant & Sons on July 1, Mr McCroskie declared: 'This reflects our choice to focus on the premium end of the market, where we are best placed to compete.'
He added: 'Looking ahead, the political and economic backdrop remains volatile, which we expect will continue to weigh on consumer sentiment in the coming year. We believe top-line growth will be difficult to come by in this environment, although adjustments to overheads and brand investment are expected to align net sales and core contribution more closely next year.
'Edrington's strategic focus on ultra-premium spirits remains effective. We will continue to execute it to strengthen our brands and our business for the long-term benefit of our investors, our employees, and those who benefit from our own and our principal shareholder's charitable activities.'
Edrington employs more than 3,000 people in its wholly owned and joint venture companies, with over half employed outside the UK. It distributes its brands to more than 100 countries.