Whyte & Mackay profits soar but not to new heights

Scotch whisky group Whyte & Mackay has reported a 36% increase in turnover to £229.8 million in the 12 months to 31 March, fuelled by a rising demand for Scotch.

Pre-tax profit rose 24% from £12.4m to £15.4m. The news is welcome for the group, which has been owned by Vijay Mallya’s struggling United Spirits since 2007 and is now partially owned by Diageo too since the latter negotiated a deal for a 53.4% stake in United Spirits earlier this year.

However, the pre-tax profit is still short of the £31.7m record set only two years ago. On the other hand, the group’s profits dropped some 60% last year when production moved away from bulk production to ageing more of its own label spirits.

Furthermore, with Diageo’s involvement with United Spirits, UK competition laws may mean Whyte & Mackay will be put on the market if the Office of Fair Trading and Competition Commission believe Diageo controls too much of the Scotch whisky market.

Diageo’s chief executive, Paul Walsh, however has already stated that he sees no reason why they would have to let Whyte & Mackay’s four distilleries – including Dalmore and Jura – go.

The authorities though will not consider the deal until the transaction is fully formalised early next year.