Not a mention of Diageo in Sunday Herald focus on Scotch, vodka and growth

The Business section in today’s Sunday Herald has majored on the all but absolute lack of growth in production volumes in the Scotch whisky industry – a total of 2.6% in 30 years from 1978 to 2008.

In ‘Cheers for nothing. The whisky industry’s complacency has cost us 52,000 jobs‘, it contrasts this growth with the 3.5% per annum growth of vodka over the last 20 years, a rate of increase around 43 times faster than that of Scotch. Rightly it points out that for the drinks industry, Scotch is a craft product, slow to mature where vodka can be on sale within a week of its distilling.

It mentions the Scotch Whisky Association.

It bemoans that much production of Scotch is not controllled from Scotland but from London; and that much is also ontrollled from elsewhere. It references the brands that fell into the hands of Paris-based Pernod Ricard (Glenlivet, Chivas Regal, Ballantine’s).

A parallel article by Business Editor Colin Donald – “Former whisky trade insider attacks industry’s ‘complacency’ ” (based on the same analyses by industry expert Donald Blair), draws attention to the Scotch Whisky Association’s continuing opposition to minimum pricing of alcohol.

This notes that minimum pricing per unit of alcohol will have no impact on the top Scotch brands because they are already priced far above the price per unit that the proposed legislation would impose.

We have been saying exactly this since the announcement of this necessary measure on which Scotland is leading. Why has it taken The Sunday Herald so long to wake up?

This piece by Colin Donald shows Donald Blair asking: ‘Why does minimum pricing interest the SWA so much?’

The piece goes on, cravenly, to use Donald Blair’s own oblique pointing to the drift of this question, rather than address it directly itself.

It quotes Mr Blair moving on from his question by saying: ‘Since when did the SWA worry about the cheap supermarket own brands which true marketeers believe devalue the whole Scotch category and are the bane of brand owners? Do the controllers of the SWA also have significant vodka interests – especially alcopops, the entry route of many consumers into white spirits?’

Curiously, shamefully, neither Donald Blair nor Colin Donald mention the name of the elephant in the room. Diageo.

For Argyll has been providing analysis and insights unpublished and unspoken elsewhere. We have had industry analysis from an insider Scotch whisky distiller who is deeply concerned about the direction and control of the industry, Mark Reynier from the notably innovative, successful and independent Bruichladdich distillery on Islay.

We have, from the outset, named the elephant.

These anxious hints – quoted above, that are all Donald Blair, Colin Donald and The Sunday Herald feel free to publish. The granting or withdrawal of advertising and for writers, access to sources for stories, are potent instruments of Diageo’s control of the media.

The truth hinted at in the final quotation from Donald Blair in the Sunday Herald’s second piece – repeated above – is that Diageo control the SWA and, to all intents and purposes the Scotch whisky industry.

The Chair of the SWA is Paul Walsh, who is Diageo’s CEO.

Diageo singlehandedly owns 40% of the the production of Scotch whisky. Pernod Ricard, which The Sunday Herald writers were brave enough to name, is a big player in the industry but owns about half the production volumes of Diageo.

Diageo also has massive interests in the vodka and alcopops market – the main intake by binge drinkers and serious revenue generators for this, the worlds biggest drinks company.

The major cut-price promotions it runs for such products are rightly targeted by the minimum pricing strategy. This is why Diageo is opposed to this legislation. This is why the ‘SWA’ (aka Diageo) continues other interests of its controlling distiller.

The legislation is aimed at reducing the social ills that see, UK-wide, one alcohol-related casualty appear at an A&E department every 40 seconds; and which place a burden of £900 per annum on every Scottish adult.

For anyone who really wants to know about the role, power and strategies of Diageo – a wealth-and-patronage driven lobbying organisation of awesome power (why else is the Sunday Herald loath to mention the one name most germane to the situation it examines?) – here is a selection of articles we have carried. Many more may be found by entering ‘Diageo’ in the search box in at the top right of this page, below the banner.

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Related Articles & Comments

  • What’s the betting that lots and lots of “independent observers” who all, for some reason, really want to defend Diageo will appear starting at about five-past 9 tomorrow morning?

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    Penny January 17, 2010 4:09 pm Reply
  • Even the most basically informed semi-conscious individual that has been awake for any part of the last 6 months or so will know that the new minimun pricing policy will have very little affect on the price of Diageos products! in fact , the opposite will probably be more of an accurate guess because when the lower end of the market IS affected by the price rises then a percentage of those buying from that end of the market may feel it worth thier while just to pay that wee bit extra seeing as the gap is so much less to get a better product!

    If your main concern was with the drinks industry on the whole for being so detrimental it would be a fair argument but your constant critisism of Diageo shows everyone very obviously where your “concerns” lie, its very sad and transparent.

    I have said before that jakeys and alkeys do no stand at street corners knocking back bottles of Smirnoff and Johnnie Walker Black Label !!! Diageo also runs avery high profile responsible drinking campaign.Do all those people that bemoaned the loss of jobs at Kilmarnock wish to see more jobs lost due to the drop in sales of products in the drinks industry ?because it is quite simple, there will be a knock on affect !

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    Gavin January 17, 2010 6:30 pm Reply
    • For Gavin re comment posted on 2010/01/17 at 6.30pm:
      That our focused attention has been brought to bear upon Diageo is the result only of that company’s track record.

      In our view Diageo boasts of its corporate citizenship policy while failing to exhibit genuine corporate social responsibility towards communities, the Scotch whisky industry and drinkers.

      This is evidenced in:
      1: the company’s overriding of local residents’ concerns in insisting on rebuilding in situ the collapsed grain silos at Port Ellen on Islay – where it was very lucky to get away without fatalities in the cottages below the silos;
      2: the tankering away from island distillery locations (as in Islay and Skye) of single malt whisky for maturing in the industrial Central Belt of Scotland, while advertising the reality very differently in overseas marketing;
      3: the lack of care for entire and loyal communities and workers as in the closure of the Johnny Walker bottling plant in Kilmarnock with the loss of 700 jobs in one modest town;
      4: the recruitment of new young drinkers to Diageo brands under the guise of promoting responsible drinking during University Freshers’ Weeks;
      5: the legal avoidance of its proper UK tax burden – as the infamous Leona Helmsley, on trial once in New York for tax evasion (the illegal end of the spectrum), said: ‘It’s only the little people who pay tax’. The unimaginably rich Diageo spends hugely on tax accountants to avoid legally its own tax responsibilities to the nation and sponge off the rest of us.
      6: its use, through its power in the industry and its chairing of the organisation, of the Scotch Whisky Association (SWA) to front opposition to the Scottish Government’s proposed legislation on the minimum pricing of alcohol. This will not at all affect the quality whisky market, already priced well above that level – but will affect the cost to the consumer of Diageo’s cheap vodka and alcopops. These are nothing to do with the SWA – so are left unmentioned – but are a massive revenue generator for Diageo;
      7: and we hardly have to mention the shameful degrading of the Cardhu brand. That is branded, in the fullest meaning of the word, upon Diageo for good.

      Diageo is the largest drinks conglomerate in the world. Its power and wealth give it massive economic influence in many nations. It has an expensive and well organised lobby operation, evident at Holyrood and at Westminster where the UK Government has come under criticism for being too close to the drinks industry.

      All we hear in public, when Diageo doesn’t get everything it wants – including unearned respect – are a series of whinges, squeals and bullying tactics from this juggernaut of a profit-above-all machine.

      You seem to have bought into that Gavin, echoing the threats that ‘there will be a knock on effect’ of drawing attention to instances where Diageo’s actions are less than admirable.

      There may be two-way knock-on effects, of course. Diageo might usefully reflect that vindictive action on its part might provoke knock-on effects of quite a seismic kind.

      It’s important never to forget that all large organisations in any sector of society and the economy need to be watchfully scrutinised by the public and by those, like us, who inform it from a disinterested stance. This is the essential set of checks and balances that lets democracy walk its daily tightrope.

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      newsroom January 18, 2010 11:15 am Reply
  • I was wrong – it was half-past 6 this evening!

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    Penny January 17, 2010 7:52 pm Reply
  • How is sunny Park Royal?!

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    Penny January 17, 2010 7:54 pm Reply
  • thats right, you were wrong, now would you like to respond to any of the points that i made ?

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    Gavin January 17, 2010 8:03 pm Reply
  • Utter rubbish, Gavin

    Diageo are responsible for a huge proportion of the alcopops and other dangerous drinks at the bad end of the spectrum but they’ve obviously deceived you by their talk of quality malts etc.

    “Quality” products are already retailing at above the minimum pricing level as are all drinks bought over the bar in pubs so they will not be affected.
    The irresponsible drinks industry is making vast fortunes out of unloading oceans of cheap alcohol at virtually no profit in various forms into supermarkets. The loss of employment in stopping this trade would be minimal and any loss retailers made in volume would be made up through obtaining higher prices.
    The cost of this is paid for all of us as the NHS spends about 25% of its total budget dealing with alcohol related problems and the police and court sytems face an ever higher penalty.

    I have very considerable experience behind me in the alcohol business. I would double the price of the alcohol content in drinks right now, ban drinking in the streets, remove licenses from supermarketrs and neighbourhood stores, cut pub hours to a maximun 60 hours per week and make all off sales through licensed bars and give bars a maximum of two late nights per week.

    When I was heavily invoved in the licensed trade twenty years ago a bottle of whisky or vodka retailed at about £10. It retails at about £10 today. Don’t try to tell me this has nothing to do with our rampaging drinks problem.
    And don’t even bother trying to tell me that we have some God given right to drink as much alcohol as we like when the rest of us pick up the tabs for the destruction of our society through alcohol.

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    Willie McEwan January 17, 2010 8:44 pm Reply
  • As an ex-offsales licensee I totally agreed with Willie’s comments above. You only have to look at the problems surrounding Buckfast that are being highlighted in the papers today. 5000 crimes in the Strathclyde region in 3 years in relation to Buckfast alone.
    It is a shame that some of these products cannot be baned out right.

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    Mark McCormack January 18, 2010 12:47 pm Reply
  • “It’s important never to forget that all large organisations in any sector of society and the economy need to be watchfully scrutinised by the public and by those, like us, who inform it from a disinterested stance. This is the essential set of checks and balances that lets democracy walk its daily tightrope.”…………..as is the case with this and other media outlets that continue to spout misleading articles heavily biased against one company! My main point was that for obvious reason you have felt obliged once again to sling mud at diageo. Any good and fair piece of nuetral journalism would report on the subject with regard to the industry on the whole, but that is not the point of this article is it ! this article is clearly aimed at having yet another stab at Diageo! Bringing up subjects that have no direct association with this topic….Diageo job losses at Kilmarnock while I have not yet seen one single article on the Whyte and MacKay job losses in ARGYLL which have already taken place! banging on about Diageos advertising whilst showing your proud association with “Mark Reynier from the notably innovative, successful and independent Bruichladdich distillery on Islay” (can you possibly lick a little harder) who seek more publicity and advertising than probably any other Islay distillery !

    I am all for democratic speach, its the biased and sickly one sided propaganda that i object to.

    Instead of going on like a stuck record about the point you have brought up above which have been and still can be discussed on other topic boards on this site, why dont you explain exactly which diageo products will be affected by this pricing policy, how much the price rise will be, and what affect it will have on Diageo ? not your thoughts, good hard facts just like a good journalist would do!
    And while you are at it…could you tell me where the “cottages” are that were so close to resulting in the loss of life when the silo unfolded? I have lived in Port Ellen all my life and cannot think of one single cottage anywhere near them? but im sure you are right, you wouldnt publish any innacuracies I’m sure.
    I look forward to a clear precise reply full of facts rather than opinions and badly researched rantings.

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    Gavin January 18, 2010 7:54 pm Reply
  • good to see that you are taking your time and trying to get your facts right before you answer my questions

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    Gavin January 20, 2010 7:30 pm Reply
  • It is worth noting that plain alcohol is very cheap to produce. For a cheap bottle of “vodka” the bottle cost as much to produce as the contents which are worth only a few pennies.
    When somebody buys a bottle of cheap “vodka” he is buying a product made from any vegetable matter at all which is not far removed from surgical spirit . At just over £8 around £7.50 of this goes in excise duty and vat.
    This spirit is used to make similarly cheap “gin” and to fortify cheap wine into “sherry” and to adulterate sugary fruit concoctions into alcopops
    Better quality drinks of course cost more to make up but the fact that a bottle of Grouse or a bottle of Whyte and MacKay cost about the same as it did a decade ago indicates that we have fallen into a trap of making poison too cheaply available.
    Buckfast is a sweet and cheap French wine adulterated with caffeine.
    Our society decided along long time ago that the ingestion of the dangerous poison alcohol should be distributed under very strict controls – but this was mainly because it could not be prohibited effectively.
    We used to have a very wise view about alcohol. Unless taken in very moderate measure it is always damaging.
    Liberal attitudes ignored this and imagined foolishly that if we had relaxed licensing hours and readily available drink cheap we would all be more civilised.
    In fact we have all got more pished. Any half sensible person could have worked that out.
    I’m with Willie on this one (and I have held several drinks licenses in my career).
    Time we went back to the old regime.

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    David McEwan Hill January 20, 2010 10:38 pm Reply
  • I am still waiting for answers to my questions from the “newsroom” of this site. If you are prepared to publish your strong opinions on certain subjects then at least be in a position to answer any questions put to you with regard to that subject! not omly from your original post but to push it even further by responding directly to my posts!

    So just to remind you of the questions:

    explain exactly which diageo products will be affected by this pricing policy, how much the price rise will be, and what affect it will have on Diageo ? not your thoughts, good hard facts just like a good journalist would do!
    And while you are at it…could you tell me where the “cottages” are that were so close to resulting in the loss of life when the silo unfolded? I have lived in Port Ellen all my life and cannot think of one single cottage anywhere near them? but im sure you are right, you wouldnt publish any innacuracies I’m sure.
    I look forward to a clear precise reply full of facts rather than opinions and badly researched rantings

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    Gavin January 31, 2010 12:57 pm Reply

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