Diageo halts plans for £50m distillery

Diageo has postponed its plans to build a new £50 million distillery in Alness, Scotland, due to a “weaker global economic environment.”

Diageo has been investing in Scotch whisky production since 2007 believing in the “long-term potential” in the Scotch whisky category around the world.

However due to slowing growth in China and South America, the company has said it is reviewing its next steps and has halted work on its planned £50m “super distillery” near Alness. 

A company spokesperson said: “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 Scotch whisky inventory and to retain the alignment between growth in production volumes and growth in demand.”

The Alness plant was planned for to comprise 16 copper stills and the capacity to distil 13 million litres of spirit each year, or 45 million bottles while creating 20 jobs.

It would have been only the second major malt distillery to have been built in more than 30 years following Roseisle in Moray, which began production in 2009 and has a capacity for 10 million litres of spirit each year.