Whisky Advocate

Cutty Sark goes to Edrington, Glenrothes goes to BB&R

February 4th, 2010

This press release from Edrington came into our office yesterday, but I was on the road and wasn’t able to post it up. What does it all mean to us, the whisky drinker? I honestly don’t know.

Press Release:

BERRY BROS. & RUDD TO SELL CUTTY
SARK BRAND TO EDRINGTON

Wednesday, 3rd February, 2010
for immediate release

Britain’s leading fine wines and spirits merchant, Berry Bros. & Rudd (BB&R), today announced that it has finalised an agreement under which it will sell the Cutty Sark blended Scotch whisky brand to The Edrington Group, makers of The Famous Grouse and The Macallan.

Under the deal, BB&R will acquire The Glenrothes single malt brand from Edrington, which has signed long-term supply agreements to provide whisky fillings and stocks to BB&R. Edrington will retain ownership of The Glenrothes distillery.

The transaction will also involve Edrington acquiring all distribution contracts on Cutty Sark in force at the time of completion.  The Edrington sales-and-distribution alliance (Maxxium) will continue to distribute The Glenrothes in key international markets and is also expected to provide a distribution option for other brands within BB&R’s super-premium spirits portfolio.

The agreement is due to be concluded by April 2010. The total consideration has not been revealed.

Hugh Sturges, managing director, BB&R, said the sale of the Cutty Sark brand and purchase of The Glenrothes was in line with the company’s long term vision of concentrating investment resources behind developing a world leading position as a supplier of fine wines and super-premium spirits. “The strategy that supports this vision is already reaping dividends, particularly within emerging markets,” said Mr. Sturges. “We are convinced that future growth will come from us focusing even more on our strengths. That means targeting our sales and marketing efforts on those brands and sectors where we can compete most effectively and develop market positions that will drive real value long term. We therefore believe this agreement is in the best interests of the brands concerned and both companies.”

Ian Curle, chief executive of Edrington, said the deal would enhance the group’s position as Scotland’s leading international premium spirits company and strengthen its position in the Scotch whisky category with an unrivalled and well-established portfolio of leading blended and single malt brands.

“In an ever-consolidating drinks industry, this agreement offers significant operational synergies and market advantages. It improves our distribution in key territories and strengthens our position as an independent premium brand company,” said Mr. Curle.

Edrington has enjoyed a long-term partnership with BB&R under which it has supplied blended whisky for the Cutty Sark brand for over 70 years and is currently responsible for all aspects of producing Cutty Sark. Today, Cutty Sark is a top three whisky brand in Mediterranean countries such as Greece, Spain and Portugal, where it is popular in the fast-moving on-trade. The brand continues to have a strong presence in America and is increasing its footprint in Asia and developing markets.

In Spain, Cutty Sark’s largest market, the distribution agreement with Importaciones Varma will come to an end prior to the completion of the sale of Cutty Sark. The brand will then be handled by Maxxium Espana, a 50/50 joint venture between Edrington and Beam Global Spirits & Wine. In Greece, the distribution of Cutty Sark will remain with WS Karoulias, which will continue as a wholly-owned subsidiary of BB&R.

BB&R said the acquisition of The Glenrothes reflected its ambition to grow its super-premium business as the brand was one of the world’s fastest growing single malts.

The long standing relationship between BB&R and Edrington will continue under the new arrangement. Both companies will continue to work hand-in-hand on projects of mutual interest that aim to maximise shareholder value and support the long-term development of their brands.

13 Responses to “Cutty Sark goes to Edrington, Glenrothes goes to BB&R”

  1. Monique at the Dell says:

    Hopefully their arrangement can hold up. I am interested to hear the details here.
    As long as we don’t see quality or price change, right?
    Maybe we can free up some capital and re-open Tamdhu…

  2. Alex says:

    I’m with Monique – reopening Tamdhu would be great – but I’m not sure if BBR ownership of Glenrothes will affect pricing. The select reserve seems to be a good malt for reasonable money, a disappearing act nowadays, and we can only hope it will stay that way into the future.

  3. Red_Arremer says:

    I thought that BB&R was already handling Glenrothes. I know the vintage thing was their idea. Did Edrington buy it at some point?

    • John Hansell says:

      Handling (distributing) is different than owning. And incidentally, Edrington still keeps the Glenrothes distillery. BB&R is just getting the brand.

      • Alex says:

        I jst noticed that Edrington keeps the distillery – so this is a label sale and is based on a supply agreement which I guess I can understand. I was always surprised that Edrington gave up their Islay distillery, Bunnahabhain, and after hearing of Tamdhu’s close and this sale, I was concerned over the company’s direction and health. They seem rare in that they focus solely on Scotch whisky. Interesting times we live in.

  4. I’m a big fan of The Glenrothes. Every vintage they produce is a new beginning, so I don’t see this as something that will potentially “change” the whisky. As others have suggested, I DON’T want to see a price increase.

    Are there other examples of a distillery being owned by one group and the brand by another? Seems a weird set up. Who controls what?

    John — do you have any news about Alba Reserve?

  5. ronnie cox says:

    Hello John,

    This news is good news……………

    -The brand Glenrothes will now be wholely owned by Berry Bros. & Rudd Ltd. with supplies guaranteed.
    -There is no intention to raise prices beyond those relating to costs. It is, after all, BB&R who have been setting these prices since 1994. Plus ca change!
    -We shall continue to produce Vintages whilst maintaining the consistent flavours from vattings of Select Reserve as well as it’s spicier cousin Robur Reserve and, of course, the all-ex-bourbon-cask and Kosher- certified, Alba Reserve.

    Ronnie Cox
    Brands Heritage Director, The Glenrothes

  6. John Hansell says:

    Thanks Ronnie for joining us. It’s always nice to have company reps participating here on WDJK.

  7. Robinsky says:

    Has anyone tried the new 1994 yet? It’s a wonderful dram and is the same price as the 1991 which is apparently ‘extinct’

  8. [...] Brothers & Rudd have sold Cutty Sark to the Edrington Group in exchange for The [...]

© Copyright 2014. Whisky Advocate. All rights reserved.