Diageo puts £50m distillery plan on hold

PLANS for a £50 million Diageo distillery have been put on hold due to the slowdown in global demand for whisky.

Construction of the distillery at Teaninich near Alness was announced two years ago as part of a £1 billion programme by the spirits giant. Investments in existing sites at Mortlach on Speyside and Clynelish in Sutherland have also been delayed.

Last month, Scotch Whisky Association figures showed exports in the first half of the year fell by 11 per cent to £1.77 billion compared to the same period in 2013.

A spokesman said: “Diageo’s investment in expanding our Scotch whisky production business began in 2007 and reflects the long-term potential we continue to see in Scotch around the world. Since then we have successfully completed major expansions across a number of our distilleries, packaging sites, maturation warehousing and support operations.

“Our long-term investments are naturally planned in phases to give us the ability to adjust to fluctuations in demand and to ensure the right balance between supply and demand.

“The weaker global economic environment has impacted the growth of Scotch in certain markets and therefore Diageo will continue to review and adjust the timing of the next phase of our investment programme to manage our inventory and retain the alignment between growth in production volumes and growth in demand.” PERRY GOURLEY