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Emperador bringing Scotch whisky to Asia

Whyte & Mackay to develop low-priced products
/ 09:34 AM September 17, 2014
Screengrab from www.emperadorbrandy.com

Screengrab from www.emperadorbrandy.com

MANILA, Philippines–Andrew Tan-led Emperador Inc.—which expects to seal a £430-million deal to take over iconic Scottish scotch whisky-maker Whyte & Mackay in the next few weeks—plans to bring the latter’s premium brands to the Asia-Pacific and develop low-priced whiskey for the Philippine market.

In a briefing after the stockholders’ meeting of Emperador’s parent conglomerate, Alliance Global Group Inc. president Kingson Sian said while the acquisition of Whyte & Mackay had given the group a distillery in Europe, this acquisition also gave the Scottish brand greater access to regional markets.

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For the Philippine market, Sian said the group planned to introduce an “affordable” whiskey brand, one that will cost less than P100 a bottle.

“We’ll introduce local new products for the local market and at the same time help Whyte & Mackay develop the Asian market in which they are not strong,” Sian said.

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Sian said the potential Asian market for the distribution of Whyte & Mackay’s branded products was huge given increasing consumer affluence in the region. For instance, he said the network of duty free shops in the region could be a good starting point for distributing new foreign brands.

“We’ll help them open doors for their products,” he said.

The premium products like single-malt Dalmore would still be produced out of Scotland, but Sian said Emperador could use the group’s technology to produce other types of whiskey.

The distillery’s Dalmore heritage traces back to 1263, during the reign of King Alexander III of Scotland.

At present, the Emperador group is only awaiting regulatory approvals to close the acquisition. About two-thirds of the requirement will be covered by debt and the remaining debt by equity.

Asked whether the group would invest more in Whyte & Mackay on top of the equity acquisition, Sian said the offshore company had its own capital spending requirement.

Emperador earlier outbid a number of global consumer powerhouses—like French luxury goods conglomerate LVMH Moet Hennessy Louis Vuitton SA, American liquor-maker Brown-Forman (makers of Jack Daniel’s whisky), Gruppo Campari of Italy and Russian billionaire Roustam Tariko, producer of Russian Standard vodka—to bag a deal to take over Whyte & Mackay.

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India’s United Spirits Ltd. agreed to sell its Whyte & Mackay scotch whisky unit to Emperador in a deal that satisfied UK antitrust concerns. Sian said the acquisition was now only awaiting clearance from the Reserve Bank of India. The Indian banking regulator’s approval was needed because the sale will result in a significant write-off of loan amounts recoverable by United Spirits from its British subsidiary.

Previously, United Spirits was owned by Indian tycoon Vijay Mallya, who had to sell out after the collapse of Kingfisher Airlines. But as Diageo’s takeover of United Spirits is feared to jack up whisky pricing in the UK, this sale of Whyte & Mackay was made to ease regulators’ concerns.

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