Diageo plans for Scotch production expansion

Diageo has announced plans to expand its Scotch whisky production in Speyside, northern Scotland, after submitting an application for a £9.5 million upgrade of its Dailuaine distillery.

The plans would see an upgrade of the existing bio-plant at Dailuaine, which deals with whisky by-products from a number of Diageo’s distilleries, opening the potential for future production capacity increases across Speyside.

Diageo, which runs more Scotch whisky distilleries than any other company, is also developing a series of proposals which would follow the Dailuaine proposal and which would see production capacity increased at existing distilleries by over 10m litres per year over the next two to three years – the equivalent capacity to building a major new distillery – with an investment of around £10m.

The details of these plans are still being developed and will be rolled out gradually over the next two to three years, subject to the relevant planning processes, the company said.

The Speyside region is home to 17 of Diageo’s 28 malt whisky distilleries in Scotland. The world’s biggest drinks company has already invested heavily in the region with the opening of the Roseisle distillery last year – the first major malt whisky distillery to be built in Scotland for more than 30 years, at a cost of £40m.

Announcing the plan, Diageo’s malt distilling director Brian Higgs said: “Scotch whisky has never been more popular around the world. In recent years we have been able to translate that into significant capital investments in our operations as we build our capacity to meet the global growth potential of Scotch.

“Speyside is already at the heart of our malt distilling operations and I am delighted that, beginning with the Dailuaine proposal, we are looking at further enhancing our business in this area.”

Bryan Donaghey, managing director of Diageo Scotland, said the announcement was the latest in a significant ongoing Scotland-wide investment in Scotch.
 
“Over the past six financial years Diageo has invested around £600m in its business in Scotland, including our new £40m distillery at Roseisle in Speyside which we opened last year,” he said. “This announcement is another demonstration of our confidence in and commitment to the future of Scotland and Scotch.”

Diageo is also investing in Scotch whisky growth outside of the Speyside area. This year will also see £3.2m capital investment in increasing capacity at the Glen Ord distillery near Inverness.

Earlier this year, Diageo announced a £3.5m investment in increasing capacity at its Caol Ila distillery in Islay.