Diageo to invest 1bn to meet rising demand for whisky

Diageo, the FTSE 100 alcoholic drinks giant, has unveiled plans to substantially boost its whisky production by between 30 and 40 per cent to make the most of soaring global demand for Scotch.

The Johnnie Walker and Bell's whisky owner will spend £1.0bn on a new malt distillery and expand its bottling capacity at its existing distilleries as part of a five-year expansion programme. A second distillery will be built if global demand requires it.

The company will hire around 100 new members of staff, a large number of which will be apprentices, while the money will also go towards the anticipated 250 contruction jobs and a further 500 positions in other industries.

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Diageo has previously posted a 50% leap in total net sales of its Scotch whiskies and malts in the past five years, equivalent to a third of its profits in 2011 after total sales reached £3.0bn.

Earlier this year total whisky exports reached the £4.2bn mark, according to the Scotch Whisky Association. Diageo's Johnnie Walker brand is the world's best-selling scotch.

Chief Executive Paul Walsh said: "This is a pivotal moment in the development of the Scotch whisky category for Diageo. Over recent years our brands have achieved remarkable, sustained global growth. Scotch whisky is Scotland's most celebrated manufactured export, led by brands like Johnnie Walker, resonating with consumers from Boston to Beijing.

"We expect that success to continue, particularly in the high growth markets around the world, which is why we are announcing this major investment in Scotch whisky production, committing over £1.0bn in the next five years, to seize that opportunity for global growth."

The Scottish Finance Secretary has welcomed the investment plan, saying it "demonstrates that Scotland is very much open for business and investment".

"The investment in new distilleries and warehousing capacity is a vivid illustration of the positive and optimistic outlook for demand in the sector," he added.

The firm's share price rose 2.34% to 1,552p by 12:29AM.

NR