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Last Updated: Sunday, 30 November, 2003, 12:12 GMT
Whisky's reputation 'under threat'
By Tony Hunt
Deputy Group Managing Director with William Grant & Sons

Cardhu is produced at Knockando in Moray
Cardhu is now being marketed as a "pure malt"
A decision by drinks giant Diageo to change the composition of the famous Cardhu malt has caused waves of protest around the world.

Diageo's global brand director told BBC Scotland News Online that the implications of the move had been distorted and over-dramatised.

However, rival whisky maker William Grant & Sons, whose products include Glenfiddich and The Balvenie, claims the industry's reputation is being damaged.

Its deputy group managing director tells us why.

Whisky is Scotland's second largest export, and key to our economy.

Anything, which threatens Scotch, threatens our prosperity.

This is why so much media attention has been focused on the damage that Diageo's latest Cardhu marketing ploy may do to the international standing of Scotch whisky.

In the last few weeks Prime Minister Tony Blair has been challenged on Cardhu during Prime Minister's Question Time, the first minister has been asked to take action in Holyrood, and Diageo have been accused of "sharp practice" in the European Parliament.

Virile Scots

This story has a 50-year history.

Fifty years ago we exported the first bottles of Glenfiddich to England.

People in the whisky industry said we were mad.

The effete English would never take to "single malt".

The virile Scots would continue to drink malt whisky, and the rest would be used, as it always had been, for making good blended Scotch whiskies.

Thankfully the industry was wrong, the English took to Glenfiddich, and so did the French, the Americans and the Japanese after them.

Many other fine single malt whiskies such as The Macallan, Glenfarclas, Glenmorangie and Bowmore followed the path we blazed.

Today single malt is the flagship of the global Scotch whisky business.

William Grant & Sons makes rival products such as Glenfiddich

In the last year 61 million bottles of Scotch malt whisky have been drunk in 180 countries.

Placed side by side these bottles would stretch for 3,000 malt miles.

Consumers prize single malt for its specialness.

In a world where products are mass-produced under the scrutiny of cost-paring accountants, people value genuine quality and authenticity, things that are made with care.

You could not find products more authentic than single malt Scotch whiskies.

They are made only in Scotland, and each brand comes uniquely from its own distillery.

You know that every drop of The Balvenie comes from the tiny Balvenie Distillery.

Glamorous dimension

As a result single malts are the crown jewels of the entire Scotch whisky business.

Speciality shops around the world sell the older single malts at very high prices - a bottle of Glenfiddich 21 year old for Christmas will cost you just under 60, and if you want to really celebrate there's a nice bottle of The Macallan 60 year old on sale in Heathrow at a mere 26,000.

Most of us would never dream of buying whisky at this price, but their presence gives an extra glamorous dimension to the whole Scotch whisky category.

Scotland can be proud of this business.

You can build a stock-exchange-driven dot.com bubble overnight, but there are no short cuts in building business like single malt, built on craftsmanship and quality, creating employment for the long term. What has united and outraged the entire Scotch whisky industry is Diageo's readiness to risk all of this to solve a short-term stock problem.

For the last 30 years Diageo has been marketing Cardhu single malt.

If you can't trust their single malt any more, what are the Scots doing to their blends?

As a result of under-estimating demand, or not investing enough money in whisky and casks in the 1990s, they have run short of stock.

Other companies have faced similar problems in the past and have either rationed their sales for a time or reduced the age at which they bottled their brands.

Diageo have found a different solution. Since they are short of Cardhu they will simply fill the bottle with a mixture of malt whiskies of which they have surplus stock.

Same name, same bottle, different liquid, with the change neatly blurred by the use of the word "Pure Malt" instead of "Single Malt" on the label.

And with luck the Spanish consumer - the biggest drinker of Cardhu - will not notice, or will not care.

Other Scotch whisky companies regard this as a catastrophe.

News of Diageo's spin on Cardhu has already reached the media in North America and the bars of Tokyo where they certainly do care.

Vatted malt

As these consumers realise what has been done they will certainly begin to question the authenticity and integrity of other single malts.

And make no mistake; the next question will be "If you can't trust their single malt any more, what are the Scots doing to their blends?"

Diageo claim that they are crusading for innovation in an industry bogged down in tradition.

But in fact there is nothing new about mixing vatted malts.

Famous Grouse has a highly successful Vintage vatted malt, and Diageo sell a vatted malt called Johnnie Walker Green Label.

No one in the industry has blinked an eye-lid at either product.

Diageo's innovation here is limited to bottling a totally different product under a single malt brand name.

Not a Nobel prize winning breakthrough.

In fact, contrary to Diageo's spin, there has been a huge amount of genuine innovation in single malt, perhaps because many of the leading companies in single malt tend to be smaller, independent companies who have a greater commitment to craftsmanship and whisky-making (and certainly have less concern over reporting good quarterly figures to the City).

Easy competition

Glenfiddich Solera Reserve 15 year old, made using a solera system similar to the one used in Jerz for making sherry and Glenfiddich Caoran Reserve, are just two examples of recent innovations which have enhanced the single malt category rather than debasing it.

Diageo is a giant multinational company that produces one bottle in three of the Scotch Whisky sold around the world.

It no doubt looks at the smaller and family-owned companies in the single malt category as easy competition.

Certainly none of us expect any favours from Big Brother.

But we did not expect Diageo to forget that its own shareholders depend upon Scotch whisky maintaining its reputation around the world.

You can sell the pass, but you can only sell it once.

'No compromise' in whisky row
19 Nov 03  |  Scotland
'The whisky critics are wrong'
17 Nov 03  |  Scotland
'Progress' in whisky row talks
13 Nov 03  |  Scotland
Icy stand-off in whisky row
07 Nov 03  |  Scotland
Sour taste over whisky switch
27 Oct 03  |  Scotland

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