Diageo’s secret plot to change rules around Scotch whisky production revealed

Diageo has confirmed the existence of documents outlining plans for drastic changes to the rules of Scotch whisky production.

The drinks giant’s proposals, which first appeared in the Wall Street Journal, include ageing Scotch in old Tequila barrels, new blended whiskies designed to have a low-ABV, and adding chocolate to the mash during fermentation.

The world’s largest whisky-maker, which produces brands such as Johnnie Walker, Bell’s and Talisker, said it is “unwavering” in its commitment to Scotch whisky heritage, but added that it was “looking at ways to innovate” in order to safeguard the category against mounting pressure on its market dominance.

Demand for Scotch has fallen since Chancellor Philip Hammond increased spirits tax in his March Budget, already negatively impacting distillers. Back in October, the Scotch Whisky Association (SWA) revealed that 36.7 million bottles were released for sale in the first six months of 2017 – down from 37.7 million in the same period last year.

“As champions of Scotch, we are always looking at ways to innovate to both protect and secure the future success of the category,” Diageo told the drinks business.

“In doing so, we work with the Scotch Whisky Association on a range of ideas that seek to strike a balance between tradition and innovation, in a way that ensures consumers get the great products they want.”

The Scotch Whisky Association, which enforces regulations on Scotch production and provides guidelines for distilleries in Scotland, has said it is committed to its values of “quality, craft and heritage,” but didn’t rule out the prospect of changing the rules.

An SWA spokesperson told db: “Scotch Whisky is a product renowned for its quality, craft and heritage. The regulations which govern the production of Scotch Whisky are the solid foundation on which the industry’s success is built, generating over £4bn in exports to almost 200 market worldwide in 2016.”

“The SWA regularly engages with our membership on a broad range of ideas to ensure that the category is well-placed to grow in an increasingly competitive global market place.”

The Drinks Business has approached Diageo for comment.