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Scotch whisky industry told to rein in investment

Zoom in font  Zoom out font Published: 2014-06-27  Origin: offlicencenews.co.uk  Views: 34
Core Tip: The Scotch whisky industry should temper its investment in extra production capacity to avoid the extremes of surpluses and shortages that have historically hampered it, according to a leading European bank.
The Scotch whisky industry should temper its investment in extra production capacity to avoid the extremes of surpluses and shortages that have historically hampered it, according to a leading European bank.

Rabobank said distillers needed to “smooth out the lumps” by avoiding dramatic increases in production capability which leads to periods of excess stocks followed by tight controls on inventories.

The company said stocks held by whisky firms rose 17% between 2006 and 2012, a period when annual consumption increased by 11%. But it called for “a more rational rate of growth” as forecasts become more conservative.

Rabobank analyst Stephen Rannekleiv said: “The long maturation process of Scotch adds to the challenges of trying to match current production with uncertain future demand.

“The Scotch whisky industry has historically suffered from the acute cyclicality of production, which has led to excess supply followed by periods of shortage.”

 
keywords: Scotch whisky whisky
 
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