Let The Drink Talk

[Richard P.]

26 Apr 2005

Wine giant Constellation Brands has confirmed it is mulling a counter-bid for Allied Domecq, with Scottish whisky leader Diageo one of its potential partners.
The US firm said it was "at an early stage" of negotiations with a number of interested co-bidders - also thought to include Brown-Forman and Bacardi. Pernod Ricard secured pole position in the race with a £7.4 billion swoop last Thursday.
Allied shares closed up 1.3 per cent or 8.5p at 671.5p as the market sniffed an auction, while Diageo climbed 1.75 per cent or 7p to 422p on the possibility of its strengthening world beating position.

from The Scotsman

[Dollarcigars]

PAUL ROGERSON
http://www.theherald.co.uk/

MORRISON Bowmore Distillers has engineered a significant turnaround in its trading fortunes after axing 50 jobs as part of an efficiency drive and embarking on a managed retreat from the supermarket and own-label sectors.
The firm has exited an unprofitable supply contract with Safeway, now owned by Wm Morrison, and an existing contract with off-licence chain Thresher comes up for renewal this year. However, chief executive Mike Keiller stressed that the firm's focus is now very much on single malts, and that it will only consider own-label manufacture if the price is right.
"We are taking a tougher pricing line. There is no decision yet on Thresher," he added.
The Glasgow-based distiller, which was taken over by Suntory of Japan in 1994, slumped deep into the red in 2002 and 2003, blaming its woes partly on falling prices in blended and bulk whisky operations, and on rising pension costs. However, last year witnessed something of a recovery, with the distiller having cut a formerly 220-strong workforce to around 165 over an 18-month period.
The restructuring saw a significant exodus of employees in late 2003, with further departures in the last quarter of 2004 as the company restructured its sales and marketing operation.
Morrison Bowmore distills Bowmore Islay single malt, the Auchentoshan Lowland malt and Glen Garioch Highland malt. The firm has its headquarters in Springburn, Glasgow.
In 2003, Morrison reported pre-tax losses of £2.25m for the calendar year, compared with a £1.1m loss for the previous 12 months, blaming part of its deterioration on the presidential crisis in Venezuela, one of its biggest export markets.
Morrison Bowmore was, and remains, in the process of transforming itself from a support services firm supplying Suntory with blended and bulk Scotch whisky to a stand-alone single-malt company, a strategy which is now bearing fruit. At the operating level, the company posted a surplus of £1m in calendar 2004, compared with a loss of £2.4m in 2003.
The company squeezed out a small pre-tax profit of £10,025 in the 12 months to December 31, which roughly reflects the extent of the turnaround when exceptionals are excluded. Sales fell to £31m from £32.8m in 2003, but core costs were also down – from £21.9m to £18.3m.
Keiller said: "We are continuing to do well in single malts, possibly slightly better than the market generally. That's now our number-one focus. We are now far less reliant on bulk/blended sales. We still sold the same volume of blends in 2004 but we have cut our costs and the change is reflected in the results."
Morrison Bowmore is investing £1m this year to open or expand visitor facilities at its three Scottish malt distilleries in Islay, Aberdeenshire and on the outskirts of Glasgow. At Glen Garioch, Keiller said, the firm is also considering reopening the floor maltings, where barley is malted by spreading it out on a large floor and turned by hand.
Floor maltings endow a malt with a certain emotional appeal and are understood to be employed in the production of just a handful of Scottish whiskies, including Bowmore, The Balvenie and Laphroaig.
One remaining headache for Morrison Bowmore is the deficit in its final salary pension scheme, which was shut to new members in 2002. The net funding shortfall decreased to £6.9m in 2004 from £7.7m the previous year.
"It is a financial challenge to generate the cash flow to meet that deficit," said Keiller. "I don't think any of the government proposals on this issue are helpful. It just heaps more bureaucracy on (employers) and gives them little guidance on how to keep on funding uneconomic schemes."

[Erik the Viking]

Hi Dollar,

I think it's Morrison Bowmore that do the McClelland single malts in KwikSave / Somerfield. They do a Higland, Islay and another I think your pretty much guaranteed if you like Bowmore, Glen Garrioch or whatever the other one is that you'll enjoy these at 10 years old, but for how much longer?? They cost around £12 a bottle.