NEWS
BOUTIQUE SPEYSIDE DISTILLERY TEAMS UP WITH BAIJIU GIANT LUZHOU LAOJIAO
By Siulan Law Mathews DipWSET
11-4-2019
Boutique Scotch whisky producer Speyside Distillers has teamed up with Chinese baijiu giant Luzhou Laojiao to expand sales into China. The Scotch distiller is planning to increase annual production by 66% to meet demands from the world’s second biggest economy.
Speyside Distillers’ portfolio includes Scotch whisky brands SPEY and Beinn Dubn as well as Byron’s Gin.
The deal will place the company’s spirits portfolio in duty free outlets across China, USA and other key global markets, and Luzhou Laojiao will also handle distribution of Speyside Distillery products across China in its own retail stores.
Speyside Distillers is a boutique distillery situated at the foot of the Cairngorms in Central Highlands near Kingussie. The company is currently producing 600,000 liters with annual turnover at £16 million (USD21 million).
If demand grows as expected, the company is prepared to further increase annual production to around two million liters reaching annual turnover of £20 million (USD26 million).
Luzhou Laojiao, which is listed in the Shenzhen stock market, is a baijiu giant and a household name in China with annual turnover of RMB15.5 billion (USD2.3 billion).
The company established Luzhou Laojiao International Development Co. in Hong Kong as its global marketing headquarters, which is Speyside Distillers' official partner in the distribution agreement.
John McDonough, chief executive officer of Speyside Distillers, said: “Although our brands have been present in China for a number of years, most of the distribution and sales activity has been within the southern provinces.”
“This distribution agreement with Luzhou Laojiao will enable us to move to a completely different level and will help to meet the growing demand for single malt Scotch whisky from China’s urbanised, affluent young professionals," he added
The company came to the attention of Luzhou Laojiao because of its presence in Taiwan, where its brands were among the best-selling single malt Scotch whiskies.
Around 70% of the company’s global export currently goes to Taiwan, but the new distribution agreement with Luzhou Laojiao looks set to challenge Taiwan’s dominance in the company’s export sales.
(the writer can be contacted at: SLawMathews@thewinechronicle.com)
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