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Tough Choices Facing Whisky

Published:  23 July, 2008

There is so much talk of premiumisation among the major spirits players that you almost have to do a double take when you take a trip down the spirits aisle in any major supermarket or convenience store.

There is so much talk of premiumisation among the major spirits players that you almost have to do a double take when you take a trip down the spirits aisle in any major supermarket or convenience store.

But while the back bars at every trendy drinking establishment can boast the finest and dearest of all the top lines, the latter are pretty absent when it comes to the multiple facings given over to spirits on the high street.

This is the dilemma facing the major whisky players, who we concentrate on this week in our six-page whisky special. While all the fun, excitement and innovation is going on at the premium end of the market, the real business is being done at the value end of the market.

How the major spirits producers balance the need to innovate against the demands of the off-trade for sustained promotional activity - be it from the major multiples, convenience groups or independents - will be the big story for 2008.

You sense there is a ticking clock over many in the whisky aisle. All those who have been able to take the moral high road and not embark on major cut price deals in the multiples and wholesale end of the market are surely living on borrowed time. Sooner or later they will be asked to play ball.

The premiumisation debate, meanwhile, is more relevant for those looking to exploit foreign fields, particularly in India and the Far East.

That's not to say there is not business to be done in the UK at the top end of the market. It's just going to be increasingly difficult to capture the interest of a pressurised spirits buyer, never mind consumer, to splash out on £20+ lines if they are not backed up by some sort of promotional offer - which goes against the whole point of launching a premium line in the first place.

But the mood in the whisky camp is pretty bullish. With exports at an all time high and some £400 million being invested to increase production levels, the major players will have to decide where best to focus their attention. It may just mean the UK volume market is not where they want that focus to be.

Richard Siddle is Editor of Harpers Magazine

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