Almost 3 years ago, someone asked me about the requirement to bottle Scotch Whisky in Scotland.
I told them that there was, at that time, no requirement for Scotch Whisky to be bottled in Scotland. That was a true statement then and it is a true statement now.
Even at that time, the SWA was working on some legislation to ensure that Single Malt Scotch Whisky would have to be bottled in Scotland, but that would not affect the bottling of other categories of Scotch Whisky overseas. That legislation has never made it to law.
David Williamson of the SWA expanded:
As you are aware, there has never been a requirement in the legal definition of Scotch Whisky for it to be bottled only in Scotland. As Scotch Whisky has grown in popularity around the world over the last century, we have therefore seen Scotch Whisky, principally Blended Scotch Whisky, shipped for local bottling in certain export markets.
Over the years, overseas bottling developed in some markets because it was the only way in which imported spirits, such as Scotch Whisky, were allowed to operate on a level playing field with domestic spirit drinks. In contrast, bottled imported spirits would face tariff or tax discrimination, distorting competition in the market and denying local consumers choice. In other markets, Scotch Whisky has been imported in bulk for blending with domestic whiskies.
While it is likely that there would therefore be considerable legal difficulties in requiring that all Scotch Whisky now be bottled in Scotland, the situation is very different for Single Malt Scotch Whisky, as only very small quantities have been exported for local bottling in the past and any requirement to bottle in Scotland would only impact on trade to a limited extent. SWA members are therefore supportive of introducing such a requirement as part of the wider package of proposals that are currently being brought forward.
Wednesday, November 1st, 2006
But all of a sudden, Diageo’s VERY REASONABLE, if not happily accepted, plan to move bottling operations from Kilmarnock to Fife is being attacked.
Yes, jobs will be lost in Kilmarnock…But new jobs will be created elsewhere. And Fife isn’t exactly China, is it?
In this economy*, lost jobs are not often replaced in other areas of the same country, are they?
When written as “DIAGEO’S plan to end Johnnie Walker’s historic links with Kilmarnock could be the beginning of a process that will destroy the Scotch whisky industry,” it sounds quite alarmist, doesn’t it.
“A spokesman for Diageo accused the MPs of overreacting. “We fully appreciate that emotions are running high, but we reserve our right to have undertaken a major review of our business in Scotland,”
I whole-heartedly agree.
As Douglas Fraser, business and economy editor at BBC Scotland, correctly states
Already, between 10% and 20% of Scotch Whisky – leaves Scotland in bulk rather than bottles. Diageo sends less than half that proportion.
So articles such as Diageo plans ‘could ruin Scotch whisky’ are alarmist and unnecessary – and fueled by a political over-reaction to the necessity of consolidating jobs in a down economy – which is ANY employers prerogative.
I am sure Diageo has been dreaming of moving more bottling “off-shore” and has a perfect excuse In this economy*. And nothing in the existing OR PLANNED law prevents them from doing so. But they aren’t doing that here, are they?
The politicians got caught with their pants down and the people whom they represent who may be losing jobs will not be happy – but when the only argument the opposition has is that Diageo is laying the ground-work for ruining Scottish historical significance of a whisky brand, they’ve already lost the battle.
When will people realize that Diageo isn’t a foundation of Scottish culture – it’s a large multi-national company – that exists to bring share-holder value. And while I have been an outspoken commenter against a number of their marketing practices, as a Diageo shareholder, business consultant and MBA, I understand and accept operational review and elimination of redundancies.
That’s Business, folks.
* Vastly overused term.