The Courier & Advertiser (Fife Edition)
Edrington warns of hit to revenues and profits
ALCOHOL: Scottish whisky giant predicts Covid-19 will end company’s run of growth
The owner of Scotland’s most valuable single malt brand has warned it expects a “significant” decline in global sales and profits this year.
Edrington Group, which produces The Macallan, Famous Grouse, The Glenrothes and Highland Park, expects its four-year run of increasing revenues to come to an end this year.
Chairman Crawford Gillies said the drinks giant wasn’t immune to the economic downturn.
In his statement within newly published Edrington accounts Mr Gillies said: “While we don’t yet know the depth of the Covid-19 economic downturn or its length we do know that the years immediately ahead of us will be materially more difficult for many businesses than the relatively benign conditions we have faced over the last decade.
“Higher taxation to pay for government debt, higher unemployment and greater consumer debt will all hit discretionary expenditure.
“Not only will the ability to spend be impacted, it is possible that after the psychological shock of Covid-19 individuals’ willingness to spend could cut consumer spending even further.
“As for spirit sales, we are likely to face further downward pressure from fewer visits to restaurants, hotels, clubs and bars.”
Edrington sold Crieff-based Glenturret Distillery, which was home to the Famous Grouse Experience visitor attraction, in 2018.
Two years earlier, the group relocated almost 100 employees from Perth to its group headquarters in Glasgow. The Edrington premises were subsequently sold to the Morris Leslie Group.
Edrington’s accounts for the year ending March 31, show sales of £699.6 million compared to revenues of £661.9m in 2019.
Pre-tax profits increased from £196.6m in 2019 to £227m last year as volumes increased to more than 8.1 million cases of alcohol.
The results were achieved in the face of considerable headwinds during the year including on/off Brexit planning, protests in Hong Kong and the imposition by the US of tariffs on malt whisky, before Covid-19 hit in the fourth quarter.
Chief executive Scott McCroskie said: “Having secured four consecutive years of growth, we anticipate a significant decline in global sales and profits in 2020-21.
“We consider that the business is well equipped to respond to the changes in both consumer preferences and the channels through which spirits are sold.”
Edrington said its portfolio of single malts performed strongly during the year, with The Macallan maintaining its position as the world’s number one single malt by value.