Speyside Distillery will increase production of its single malt whisky by 66% after signing a distribution deal with a Chinese company.
The agreement with Luzhou Laojiao International Development, which is described as “a major force” in the global duty free retail market, will see output rise from 600,000 litres to 1 million litres a year.
Luzhou Laojiao will also distribute the distillery’s Spey and Beinn Dubh brands in China, where sales of Scotch whisky continue to surge.
Owners Speyside Distillers said the deal will place the company’s spirits portfolio in duty free outlets across China, the US and other markets.
John McDonough, chief executive officer of Speyside Distillers, said: “Although our brands have been present in China for a number of years, most of the distribution and sales activity has been within the southern provinces.
“This distribution agreement with Luzhou Laojiao will enable us to move to a completely different level and will help to meet the growing demand for single malt Scotch whisky from China’s urbanised, affluent young professionals.
“We anticipate that the supply demand for global duty free and duty paid within China will have a significant impact on production, which we forecast will rise by around 66% from our current 600,000 litres of spirit a year to 1 million litres.”
Speyside Distillery added Byron’s Gin to its portfolio in 2017.
Staff from Luzhou Laojiao signed the distribution agreement while on a visit to Speyside Distillery, which is based close to the town of Kingussie.
Its range comprises five core single malt expressions, which are complemented with limited-edition bottlings from historic warehouse stock. The distillery added Beinn Dubh ruby black whisky to its collection in 2015 and, more recently, the Byron’s Gin range.
Managing director Patricia Dillon said: “Our international reach has grown significantly in the past five years and our brands are now present in 34 different countries.
“Due to John’s existing business operations in Taiwan when he bought the distillery, we were very quickly able to cultivate a market for Spey in that territory and it has historically always been a key driver for sales.
“Around 70% of our global sales currently come from that region, but this agreement with Luzhou Laojiao for global duty free and internally within China sets us on a path that will challenge the volume that we have in Taiwan.
“China is a market that we have watched very diligently for a number of years, but we needed the support of a major partner before we could contemplate making the significant inroads that we now anticipate.”
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