The second edition of the World Whiskies Conference held in Glasgow in April 2008 was a special one. It marked a significant moment in the history of the global liquor industry as the heads of world’s two leading spirits companies came face to face. Paul Walsh, former Diageo and Scotch Whisky Association (SWA) Chief and Vijay Mallya, Chairman UB Group. Mallya was invited as a speaker at the conference. He delivered his speech just after Walsh and unquestionably stole the show.
That was probably the moment, which sowed seeds for Diageo Chief’s future interest in acquiring the Indian liquor major. By the end of 2008 and beginning of 2009, as UB Group reeled under major financial difficulties only to be left with the option to sacrifice USL, Diageo was eager to grab a pie in Mallya’s spirits empire. Most of us present at that conference would have agreed that Mallya’s speech subtly hinted towards his ongoing trouble with SWA for membership despite having acquired the scotch company Whyte & Mackay (W&M) in 2007. Perhaps, the scotch producers who thought Mallya would flood the European market with his cheap Indian Made Foreign Liquor saw his membership in the association rather as a threat. Considering that Indian whiskies are not even acknowledged as whisky by the scotch producers (according to them IMFL brands produced from sugarcane molasses arerum and not whisky). As fate would have it, Diageo today owns USL. So, it shouldn’t come as a surprise if the company eventually discontinues some of the USL brands, which once drove the volume business so much so that it made USL world’s number one spirits company (by volume) in 2013. Thanks to the whisky evangelist Jim Murray Indian whisky finally got its due. In 2010, Amrut Fusion Single Malt from Amrut Distilleries, Bangalore, found place in Murray’s Whisky Bible. The whisky is made, not from molasses, but from barley, blended with malt, produced in India with water from India. It caused quite a stir when he scored Amrut Fusion as the third best in the world that year. Murray’s acceptance towards the world of whiskies is testament to the changing times for the scotch industry. During his recent visit to India for the 10th anniversary celebration of Amrut Single Malt, Murray commented on the scotch producers’ excessive obsession with water. “Scotland has taken the eye off the ball when it comes to making whisky”, he said. “Water is just one part of the process, however, maturation on the other hand is responsible for the 95% of the flavour in whisky. Poor sherry casks used in Scotland is ruining the industry”. (It is a known fact that three-year maturation in Scotland is equivalent to one-year in India due to our hotter climate and that helps the whisky mature faster. Amrut uses a mix of new oak and used bourbon barrels imported from the United States for aging). Another Indian whisky that has caught the fancy of Murray is John Distilleries’ Paul John single malt variants. In the 2014 edition of Whisky Bible he gives 96.5 points to Paul John Edited and describes it as “a new Indian classic: a sublime malt from the subcontinent. To be more precise: a world classic! Think of Ardmore at its most alluring: one of Scotland’s finest and most complex single malts.” He also calls it a world-class whisky to be talked about with reverence without doubt. Both Amrut and Paul John single malts have effectively proven that India is not just a country of whisky guzzlers, it is very well capable of producing world-class whiskies too. However, Indian whiskies least concern the scotch industry at the moment. It is the growing interest for American and Japanese whiskies world over that’s raised an alarm. According to The Telegraph report, sales of American whiskey in the UK soared by 19 per cent last year with the industry now worth £190m. Woodford Reserve brand has registered a 100 per cent sale increase in the last 12 months, while Jim Beam bourbon has reported a 63 per cent rise. And to make the matter worse, not a single scotch has made it into the top five of Whisky Bible 2015. Yamazaki Single Malt Sherry Cask 2013, the Japanese single malt has been named the best whisky in the world. Murray said that the high quality of Japanese and other international whiskies should be a “wake up call” for the Scottish industry. The Rabobank spirits quarterly report for Q1 2015 states that Scotch industry is facing many structural changes which has resulted into decline in exports. Scotch suppliers are seeing a decline in export demand, which has led Diageo to defer plans to expand production capacity, while aged rum is showing positive performance, states the report. Back in 2008 in that speech at the World Whiskies Conference, Mallya had said, “The SWA spends too much time worrying whether whisky is spelt with an ‘e’ or not when it should be broadening the appeal of Scotch whisky to take on other categories head on.” He had suggested that the industry should relax its strict regulatory structure, permitting the use of natural additives in order to expand the range of flavours. Ironically, a number of whisky producers, including some scotch producers, have now ventured into flavours. Only this time, SWA and EU has twisted the guidelines a bit allowing the flavoured whisky to be labelled a “spirit drink”.
Scotch companies who have launched flavoured whiskies recently Bacardi’s Dewar’s Highlander Honey, a controversial brand launched last April is described as a “blended Scotch whisky infused with natural flavours”. Chivas released lime-flavoured Ballantine’s Brasil in December 2014 and Diageo too jumped on the flavoured “spirit drink” trend withthe release of J&B Urban Honey.
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