US tariffs a factor as Speymalt whisky sales fall
Ewen Mackintosh: ‘building for the future’
Speymalt Whisky Distributors, which trades as Gordon & MacPhail, has blamed US tariffs on single malts as well as Brexit uncertainty and the impact of Covid in Asia for a slump in sales.
The Elgin-headquartered firm, owned by the Urquhart family, said revenue fell by 18% to £33.7 million in the year to the end of February from £41m in the previous year.
Pre-tax profit declined 37.2% from £15.6m to to £9.8m, while net assets grew by over 12% from £49.3m to £55.4m.
The 125-year old company said it had been hit by a range of “global and domestic headwinds”.
A 25% tariff on imports of Single Malt Scotch Whisky imposed by the US government in October last year has been felt across the industry. The Covid crisis in Asia at the end of 2019 and into 2020 hit Gordon & MacPhail’s sales in the final quarter.
UK sales were also influenced by a strategic decision the previous year to exit the domestic wholesale operation from wine and beer to focus longer term on the growing, premium spirits sector, including single malt whisky and gin.
As a result of that shift and market conditions, UK sales were down from £26.7m to £20.6m, a reduction which was anticipated as the company shifted direction.
Reflecting the various factors contributing to global uncertainty, international sales were down from £14.2m to £13.1m. But Gordon & MacPhail retains a positive outlook for overseas markets as stability returns and demand for high-quality spirits remains strong.
Managing director, Ewen Mackintosh, said: “Despite challenging conditions we remain confident in our ability to grow and are building for the future.
“Across the year we’ve invested in Gordon & MacPhail, including our brands, infrastructure and colleagues, as part of our commitment to the continued growth of what is now a fourth-generation family business. We’ve navigated challenging global conditions, including the initial impact of Covid-19, particularly in the Asian markets.”
There is investment across the business, including the development of its second distillery, The Cairn in the Cairngorms National Park at Craggan, near Grantown-on-Spey.
The new Cairn distillery opening in 2022
Work began on site in July on the banks of the River Spey, with completion expected in 2022. To reflect expected increase in demand for single malt whisky and as a key part of the company’s commitment to a long-term sustainable business, the new facility will add further distillation capacity and offer a visitor experience.
To help finance the distillery, Gordon & MacPhail completed a £7m bulk sale of mature whisky to build up reserves.
The Cairn will complement the firm’s existing Speyside single malt distillery, Benromach in Forres.
The Benromach range had another successful year with a growth in sales, helped by the launch of 125 bottles of Benromach 50 Years Old – the oldest expression in the current range. More recently, there was investment in the Benromach brand, with a redesign and repackaging,
Two new warehouses at Benromach and investment in the company’s Red Door Gin brand continued with the opening of the visitor experience in August 2019.
Gordon & MacPhail recently unveiled a marketing strategy – Rare Whiskies Created by Unique Experience – and honoured the late George Urquhart, a member of the second generation of the company’s owning family, with a special product release.
“We’re excited to see our plans come together, not least with the development of The Cairn as we build a distillery and brand that complements our existing distillery, Benromach, said Mr Mackintosh. “We look forward to sharing our plans with whisky enthusiasts across the world in due course.
“I’d like to thank our colleagues, suppliers and customers for their support, dedication and hard work this year in a time of such change.”