Whisky Advocate

Springbank, Glengyle shutting down?

June 27th, 2008

I just received this official press release from Springbank which, while somewhat vague, confirms that they will be cutting back production.

As a consequence of the continuing instability of basic raw material prices, which have doubled within the last year, the management of J & A Mitchell and Company Ltd. have decided to cut back the production of new spirit at their Springbank and Glengyle Distilleries until prices settle. The state of the materials market will be kept under continuous review.

The opportunity will be taken to carry out necessary maintenance work and create the increased warehousing accommodation required for future development. In the short term there will however, regrettably, be a few staff redundancies. There will be no impact on the availability of bottled Springbank whisky or the Kilkerran whisky from its Glengyle Distillery as the Company has ample stocks of young maturing whisky which will enable it to continue supplying its home and export markets as normal.

The press release doesn’t say how much production will be cut back or for how long. Of course, this kind of retraction, or whatever you want to call it, is nothing new for Springbank, as it has been quite frequent throughout its life span, being a “boutique” distillery. As long as any cutback isn’t for an extended time period, I don’t think it will have a significant impact on the releases in the future.

Now, back to my vacation…

8 Responses to “Springbank, Glengyle shutting down?”

  1. John Hansell says:

    I received this note from Springbank’s importer, Henry Preiss, of Preiss Imports:

    “They are not mothballing anything just adjusting their business style to the current conditions.

    They are simply cutting back not putting the stills to complete rest and catching up on maintenance.

    Remember they were going full steam to rebuild inventories that by the end of the 90’s had been ravaged. They are now in a great stock position all done when cost were lower. Looks like nothing more than good business practices to me.”

    I can understand the “good business practice” strategy. I just wish the press release wasn’t so vague. Call it what you want: cutting back, retraction, shutting down for a while, etc. (I softened the title of the posting to phrase it as a question.) Time will tell what really is going to occur. None of this is really important in the long run–as long as the quality of Springbank in the future is not affected.

  2. orangedog says:

    Heuristically, it seems that the marginal increase in single malt prices would help offset the rise in raw materials cost. My understanding is that the SM industry doesn’t operate on traditional razor thin commodity margins, like you’d find in timber products.

    Its probably not the popular view, but maybe they just overproduced and need time to liquidate the finished inventories – which also explains why they say supply won’t shrink. I think the last sentence in your comment is the most important though – during a cut back, there will still be barrels holding aging contents that will be available down the road.

  3. John Hansell says:

    I have had a long relationship with Springbank, from my first visit to the distillery nearly 20 years ago to when I visited it last year. I have more whiskies from Springbank (and Longrow) than from any other distillery. I wouldn’t be so sensitive to all this if I didn’t care so much about the distillery.

    I only want the best for the distillery and want to see it succeed now and well into the future.

  4. sam k says:

    “In the short term there will however, regrettably, be a few staff redundancies.”

    It would seem that they are trying to apologize for layoffs without ever saying that anyone’s being laid off. The statement above would indicate that staff redundancies are to be tolerated. Considering the confusion this press release has generated, can we expect a more concise accounting of the situation in the near future?

  5. John Hansell says:

    This is from the Sunday Herald this past Sunday:

    “The Springbank and Glengyle distilleries – one of the last three remaining facilities in the once-famous whisky-making area of Campbeltown on the west coast of Scotland – stopped distilling the spirit that is used to make the malt whiskies Springbank, Longrow and Hazelburn on Friday.

    Owners J and A Mitchell said the rocketing cost of fuel, transport and barley had forced them into calling a halt to distillation of spirit for a period of up to two years, in the hope that the cost of the raw materials used to make whisky will eventually come down and allow the company to start distilling again.

    As a result of the decision, seven members of the company’s 42 staff have been made redundant in a mixture of voluntary and compulsory packages. Kate Wright, the company’s sales and marketing officer, said staff were “shell-shocked” by the announcement, which was made on Friday.”

    That sure sounds like shutting down to me.

  6. Mike Dereszynski says:

    Hi John,
    Kate said it “shell-shocked” I think everyone who knows Kate, Frank, Pete and all the hardworking crew in Campeltown are in deed shocked by the news.This year started out with high hopes especially with the Longrow releases.
    J and A Mitchell have long been known to care about their workers but their hopes for the costs of fuel,transport (again fuel) and barley eventually coming down does not make me optimistic for the workers and those who love Springbank,Longrow,Hazelburn and Kilkerran.
    Savor your collection of these fine whiskies and lets hope they never go silent.

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