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Diageo keeps growing

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@WhiskyBee
WhiskyBee started a discussion

In one of my lists on this forum, I jokingly predicted the day when "Diageo buys everything!" Now I'm starting to spook myself.

Copied from Ralfy's blog today:

By PETER RANSCOMBE Published on Friday 9 November 2012 11:43

Diageo, Scotland largest distiller, has agreed a £1.3 billion deal to take a majority stake in United Spirits, the Indian drinks giant that owns Whyte & Mackay.

Vijay Mallya, who will continue as chairman of United Spirits following the deal, will sell a 27.4 per cent stake for £660 million, with the purchase triggering a mandatory tender offer for a further 26 per cent stake from other shareholders.

The long-awaited deal – which is the largest Indian merger and acquisition deal since Edinburgh-based oil explorer Cairn Energy sold a controlling stake in its Cairn India subsidiary to FTSE 100 mining giant Vedanta Resources – follows a “will-they, won’t they” relationship that has gone on since 2008.

Paul Walsh – chief executive at Diageo, which makes Bell’s, J&B and Johnnie Walker – said: “I am delighted at the opportunity Diageo has to be part of India’s large and growing local spirits market. “Vijay Mallya’s experience in building United Spirits to the leadership position it has is unique in our industry and in his position, as chairman, I look forward to working with him to deliver value for the shareholders of both United Spirits and Diageo.”

Mallya added: “I am very proud of United Spirits and what has been created over the past 30 years to bring this company to its pre-eminent position in India. I have had a long association with Diageo and therefore I am confident that this winning partnership with Diageo provides United Spirits with the best possible platform for future growth.”

The pair are also to set up a joint venture to run a beer business in South Africa.

11 years ago

14 replies

@MacBaker62
MacBaker62 replied

I agree Diageo seems to be a ever growing monopoly, but it could be a good thing for the distilleries currently under Whyte & Makay's control. I'd love to see Dalmore and Jura bottlings in strengths higher than 40%, and less reliance on caramel coloring and chill filtering.

11 years ago 0

@Bravado
Bravado replied

I suppose if any distiller could use Diageo's brand experience, it's the Whyte and Mackay guys. The whole Jura/Dalmore/W&M line is just a weird bunch of whiskies.

11 years ago 0

@SMC
SMC replied

As an Ontarian I look forward to the standard Diageo price hike. I just can't wait to pay $90 for Dalmore 12 and $140 for Jura 16.

11 years ago 0

@cowfish
cowfish replied

There's almost no chance that Diageo will be allowed to keep W&M - the monopolies folks will be having words already. Diageo weren't after W&M, they were after the Indian assets, so one of the most likely current theories is selling W&M off to one of the smaller whisky producers.

Here's a couple of interesting articles: just-drinks.com/comment/… dramming.com/2012/11/…

11 years ago 1Who liked this?

@two_bitcowboy

@MacBaker62 If you consider most of Diageo's standard brands, bottled at 40% or 43%, I don't see much chance of Dalmore or Jura jumping onto the modern stage with higher abvs and no chill filtration or caramel coloring. However if, as Oliver suggests (see Cowfish's second link), Diageo sells off Dalmore and Jura to small or independent owners great things could be on the horizon for both distilleries and especially for all of us.

11 years ago 0

@MacBaker62
MacBaker62 replied

@two-bit-cowboy Most single malts under Diageo at bottled at 43%, or like Talsiker, 45% for standard bottlings. Looking through Diageo single malts in my collection, I couldn't find a single bottling at 40%. Sure their blends like Johnnie Walker are bottled at 49%, which seems typical for the big name blends no matter the ownership. Of the three bottles of Dalmore and two bottles of Jura currently in my collection, only Jura Superstition is bottled higher than 40%! Also, the bottles of Talsiker 10 and Caol Ila 12 I have, seem to have very pile yellow whisky inside, with no indication is coloring. The bottles of Lagavulin 16 and Talisker DE are darker, but they are sherry finished, so their coloring seems natural too.

I don't see Oliver's idea of Diageo breaking up the Whyte & Makay group, and selling it off in pieces as a likely plan, unless they plan to keep one or more of the distilleries themselves, and dump the rest. The first article's plan for selling W&M as a group sounds more likely. With a group sale, they actually keep Richard Paterson as selling point, as W&M's Master Blender, and Dalmore's Master Distiller. Like him or not, he is a show man, a respected blender, and a one man PR machine.

11 years ago 0

@MacBaker62
MacBaker62 replied

Sorry, my comment about blends should read 40% not 49%, obviously. Stupid tiny smartphone keyboard, and my big thumbs!

11 years ago 0

@two_bitcowboy

@MacBaker62 Hi. I don't have that many Diageo brands left, but my Cardhu 12 and Cragganmore 12 were both bottled at 40%.

11 years ago 0

@two_bitcowboy

I no longer have it, but the Singleton of Glendullan is also a 40%er.

11 years ago 0

@MacBaker62
MacBaker62 replied

@two-bit-cowboy, I did say most, but if we're going to quibble over this......

Auchroisk 10 (43%), Auchroisk Manager's Choice (60.6%). Brora, what bottlings you can find released by Diageo vary, but the lowest I could find was 46%, with most at the higher 58% ABVs. Caol Ila 8 (64.9%), Caol Ila 12, 18, 25 (43%), Caol Ila Cask Strength (61.6%), Caol Ila Unpeated (64%). Clynelish 12, 14 (46%), Clynelish 28 (43.1%), Distillers Edition (46%), Managers' Choice (58.5%). Glen Elgin 12 (43%), Glen Elgin 16 (58.5%). Glen Ord 15 (53.3%), Glen Ord 28 (58.3%), only the Glen Ord Singletons 12 and 15 are 40% ABV! Glen Spey 12 Flora & Fauna (43%). Glenkinchie 12 (43%), Glenkinchie 20 (55.1%), Distillers Edition (43%), Manager's Choice (58.1%). Johnnie Walker Green Label 15, the only pure malt blend in the line is bottled at 43%. An exception to the industry standard 40% for blends. Knockando 12 (40%). Lagavulin 12 Cask Strength (56.5%), Lagavulin 12 (57.5%), Lagavulin 16 (43%), Distillers Edition (43%), Managers' Choice15 (54.7%). Linkwood 12 (43%). Mortlach 16 Flora & Fauna (46%). Oban 14 (43%), Oban 32 (55.1%), Distillers Edition (43%). The entire Old Parr line of blends from Diageo is bottled at the higher than standard 43% ABV. Talisker 10, 18 (45.8%), 25 Cask Strength (54.8%), Talisker 30 (53.1%), 57 North (57%), Distillers Edition (45.8%), Managers Choice (58.6%).

The Glen Ord and Glendullan Singletons were marketed as affordable introductory Single Malts for blend drinkers looking to make the move to single malts, which explains the low ABV of the Singleton line.

The other two you mentioned, and the Knockando I listed would seem to be the exceptions, wouldn't you agree? Or do you care to "pick nits" some more? Most of the Diageo owned single malts are bottled at 43%, with some special bottlings (the Managers' Choice line for example) that are released at higher, sometimes even cask strength ABVs!

11 years ago 0

@MacBaker62
MacBaker62 replied

To be fair, I did forget to list Dalwhinnie 15 year old. I know that older bottlings were released at 40%ABV, though the bottle my wife just bought for herself has 43%ABV on the label. This list I compiled, is of what is currently available, or were recent special releases.

By contrast, I have older bottles of Jura 10 year old, and Dalmore 12 year old, that had 43% ABV on their labels. I also have more recent bottles of both the Dalmore 12 and Jura 10, at the W&M standard 40%ABV for their entry level malts. The newer Jura has lost that unfortunate "baby sick" flavor that older Jura's seemed to have, and the Dalmore 12 has more sherry influence now, but I don't like that they are even more "watered" down now!

11 years ago 0

@two_bitcowboy

@MacBaker62 Wasn't looking to pick nits or anything else. Perhaps you chose to read more into my original post than was there.

11 years ago 0

@MacBaker62
MacBaker62 replied

@two-bit-cowboy out of literally hundreds of Diadeo owned single malt offerings, you managed to find two of three bottlings released at 40%ABV. That seemed rather obviously nitpicky to me. Again we quibble over my original point that Diageo on average (most of the time), release their single malts at 43%ABV. 3 exceptions to the rule, do not alter the point, they are just nits to pick! Nothing to read into that but the facts.

11 years ago 0

@michaelschout

As much as I'm enjoying this little love fest...

Canada has a pretty good history with whisky monopolies, whether it be with Corby distillers, or later with Sam Bronfman's whisky conglomerate. It's always resulted in more modern methods, greater production, and more consistency. Hopefully Diageo will bring some of that to the lesser brands it acquires.

11 years ago 1Who liked this?