Scotch whisky industry operations – certainly not business as usual.
The UK Govt have made it clear, by allowing Off-Licenses to remain open, that the alcohol supply chain can be kept open. This would suggest that distilleries, bottling companies and distribution can continue to operate. The Scottish Parliament have not made it so clear. They have questioned whether alcohol is an ‘essential’ industry and have not made any direct statement about whether or not distilleries should close.
The Scotch Whisky Association’s view is that operations can stay open so long as they follow the strict guidelines about social distancing, public transport etc. However, it may not be these guidelines, or the Govt’s viewpoint, that dictate whether or not Scotch whisky distilleries continue to operate in the next few weeks. Rather, it may be the companies own considerations of its employees welfare. It may also be peer pressure and the fear of bad publicity that count more than what is approved or not by the authorities. How will the general public feel when large Scottish food companies shut down while distillers stay open? (Walker’s, the shortbread company, shut down production yesterday.) The industry’s reputation is potentially at risk.
We know that a small number of distillers are already closed and will remain so for a few weeks. We understand that some other services, such as cooperages and transport companies are operating a reduced level of service. And there is no question that some bottling companies have closed. The welfare of employees is the key priority.
Other distillers are continuing to operate, and some are adapting to supply neutral alcohol for the production of hand sanitisers. WhiskyInvestDirect has always stressed that the Scotch whisky industry takes a long-term approach to planning and forecasting. We have also made it clear that most distillers try to maintain roughly eight years’ worth of maturing inventory. This allows them to ride out the expected bumps along the way and be ready for disruption to demand or a production blip
What we don’t know just yet is the potential scale of the impact on the industry by Covid 19. We do know, for sure, it is certainly not business as usual. We will keep you updated.