Lazarus distilleries

The history of whisky is one of boom and bust, just like many other commodities. Often a boom contains the seeds of its own bust - it's the usual story, where attractive returns lead to more entrants, more entrants lead to overcapacity, overcapacity leads to overproduction, overproduction leads to falling prices, and falling prices lead to a bust. Often, the bust is exacerbated by some sort of exogenous shock - a world recession, say, or a change in tastes towards some other spirit.

The whisky world is widely agreed to currently be in a boom cycle, where more entrants are appearing, attracted by the returns due to a sharp increase in people drinking single malts (in previous cycles, people preferred blends). Whether this may lead to overcapacity or not is uncertain - there is now an exogenous shock on the demand side. The integration of China and India into the global economy now means that there are up to 2 billion people who could, in the next decade, afford to drink whisky. Some are already there - Macallan recently teamed up with Lalique to offer a limited edition of 55 year old single malt in a crystal decanter (retail price several thousand euros), and there was apparently a great deal of interest from India.

A more welcome effect of increasing capacity is the reopening of old, closed or mothballed distilleries. This not only increases the amount of spirit available for blends, it also opens up possibilities for single malts - not only of the closed distilleries, but an expansion in supply of existing single malts from distilleries that mostly produce for blends.

Last year saw the good news that Tamnavulin, mothballed by Whyte and Mackay since 1995, would reopen, after W&M changed ownership. The new owner, Vijay Mallya, an Indian tycoon, announced that W&M would reopen Tamnavulin, mainly in order to provide whisky for their blends. However, some investment would be made into the Tamnavulin brand, resulting in (hopefully), some official single malts. And maybe some independent bottlings. Production apparently recommenced in late 2007, and will speed up in 2008 according to the very informative Whisky Pages.

The first week of 2008 brought the news that Glenglassaugh, mothballed since 1986, is likely to be sold to a Latvian-Russian consortium, who presumably want to start up the distillery again, not just sell off existing stocks. Here's hoping to that - although, as of today, there is still no news about whether or not the deal is done. M&A transactions can certainly drag on, and the longer they drag on, the more likely they collapse...

A couple of weeks later, I happened to read some unconfirmed gossip on Whiskyfun - that Braeval (also known as Braes of Glenlivet), one of several mothballed distilleries owned by Pernod Ricard under the Chivas Regal brand, is likely to be reactivated this year, after a refit. Braeval last distilled in 2002. I suppose Whiskyfun's proprietor, Serge Valentin, must have heard it offline, as I couldn't find any news of this on the 'net.

The same piece of gossip asserted that Pernod Ricard will reopen Imperial distillery (mothballed since 1998) after it does Braeval - maybe they will be doing the same to their other mothballed distilleries? One can only hope. For now, there is no information on Imperial, other than what Serge posted.

There are 2 other mothballed distilleries that could be reopened, if the owners (Pernod Ricard) decided it would be worth doing so (of course, money is involved, since it's likely that the mothballed distilleries require investment into equipment, marketing, etc etc). I haven't been able to find much information on whether or not they will be brought back to life eventually. They are Caperdonich (mothballed 2002) and Glen Keith (mothballed in 2000). The gossip on Braeval and Imperial suggest that they could certainly be reopened, so there is some hope for now.

If only Diageo would reopen Rosebank...