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Loch Lomond signs deal to sell Scotch whisky in China

Published 02 May 2017

Scotch whisky maker Loch Lomond Group is entering China for the first time after signing a distribution agreement with COFCO.

The move will mean that Loch Lomond Group’s range of blended, grain and single malt products are stocked by the China National Cereals, Oils and Foodstuffs Corporation.

The Chinese company has its own network of 700 off-licenses, as well as working with more than 1,000 other distributors.

Colin Matthews, chief executive of Loch Lomond, said “This is a terrific deal. There is no point of us signing up a deal in China with a corner shop. Cofco are huge and are prepared to invest a lot of money in the route to market and distribution.”

Castle Li, general manager of Cofco Wine, said that the company would be using all its “resources and energy” to get Loch Lomond brands to millions of consumers. He added: “We believe that the Loch Lomond Group’s brands will have major appeal to a wide spectrum of consumers in China, where we are seeing significant growth in demand for premium drinks brands, especially Scotch whisky.”

Growth of Scotch in China tailed off last year after the government clamped down on lavish spending. However, industry giants such as Pernod Ricard and Diageo have noted growth in the market.

Exponent Private Equity backed Mr Matthews in the deal to buy Loch Lomond from the Bulloch family in 2014 and since then about £20 million has been invested in distilling, bottling and storage infrastructure. Six new warehouses have been built at Hurlford in Ayrshire and there is space for a further 20.

Total export volumes have doubled since Mr Matthews came in and sales to China are expected to grow strongly as a result of the Cofco deal.

Mr Matthews said the plan was always to aim at international markets. Initially, he said, he would have been happy to have reached between 20 and 30 markets by this stage, but “we have launched in 110 markets, that is a phenomenal number. You get into one or two and then people come to you. I hadn’t thought about Kazakhstan or Azerbaijan, but they came to us.”

Agreements to take products into retail and pubs trade in Australia are understood to be getting closer. Mr Matthews said the initial shipments to Latin America were promising, particularly in Brazil and Mexico. He said that he wanted to expand the single malt portfolio in Taiwan and that he expected growth in markets such as France and the United States.

Loch Lomond has two distilleries, Loch Lomond in Alexandria and Glen Scotia in Campbeltown, which produce single malt. Its blends include High Commissioner, Clansman and Glengarry. It also makes Glen’s Vodka and Christie’s Gin.”

Source: Company Press Release