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Whisky Concerns

Suntory to form super group with $16bn Beam
13 January, 2014

Suntory has announced it will pay $16 billion to acquire Beam in a deal that would see the Japanese group become one of the top-three spirits manufacturers in the world.
The groups, which have been tied by existing distribution agreements in Asia, have entered into a deal by which Suntory will pay a 25% premium on Beam's share price.
The combined group's portfolio will comprise brands with annual net sales of $4.3bn and will include Beam's Jim Beam, Maker's Mark, Knob Creek, Teacher's, Laphroaig, Canadian Club, Courvoisier, Sauza, Pinnacle, and Suntory's Yamazaki, Hakushu, Hibiki, Kakubin, Bowmore and Midori.
The transaction has been unanimously approved by each company's board of directors and is expected to close in the second quarter of 2014, subject to Beam stockholders' approval, regulatory approvals and customary closing conditions.
Matt Shattock, president and chief executive officer of Beam "This is a very exciting development that delivers substantial value for our stockholders and creates an even stronger global company with an excellent platform for future growth."  
"Together we will be a global leader in distilled spirits with the #3 position in premium spirits and a dynamic portfolio across key categories. With particular strength in Bourbon, Scotch, Canadian, Irish and Japanese whisky, the combined company will have unparalleled expertise and portfolio breadth in premium whisky, which is driving the fastest growth
"Our combined global routes to market will expand our joint distribution footprint, and the powerful innovation capabilities both companies have developed will be a significant advantage. Backed by the expertise and the financial resources of Suntory, the people of Beam look forward to working with the Suntory team to continue outperforming our global market and to building on the proud traditions and deep heritage of our brands across all the major spirits categories."
Nobutada Saji, president and chairman of Suntory's Board, said: "I am delighted that we can announce this agreement with Beam, a company with a portfolio of leading global brands, including Jim Beam and Maker's Mark, and a strong global distribution network.
"I believe this combination will create a spirits business with a product portfolio unmatched throughout the world and allow us to achieve further global growth. We are particularly excited about the prospect of working more closely with Beam's excellent management and employees who will play an integral part in the growth of the business."

Suntory's Beam move is just round one
Suntory's acquisition of Beam "is not the end of it by any means", leading drinks analyst Jeremy Cunnington of Euromonitor International has told DI.
Suntory and Beam jointly announced today that a deal has been struck for $16bn.
Cunnington said: "I think the major international spirits companies will try to put a counter bid together. CEOs of all the major companies will be humming with this news. Pernod Ricard in particular and a number of other companies will not give up without a fight. Pernod says they want to pay off their debt but they will not pass up the opportunity."
According to a joint statement from Beam and Suntory, the deal has been agreed by the companies' board of directors but will not be completed until the second quarter of 2014 as it is subject to "Beam's stockholders' approval, regulatory approvals and customary closing conditions".
"Agreed does not mean it' signed, sealed and delivered. It is subject to approval," said the Euromonitor International drinks analyst.
In the event of a counter bid, Cunnington said "Beam would have to be split up".
"There would be competition issues for many of the groups - for instance Pernod taking Larios. William Grant & Sons are cash rich and it would be a great chance to get a cognac (Courvoisier)," he said.
"For Rémy Cointreau there are competition issues with Courvoisier but they'd be interested in getting a small batch bourbon like Knob Creek. Diageo would be keen on Maker's Mark. They have Bulleit but it is 20% of the size of Maker's Mark," he said.
Cunnington said Suntory's motivation for the acquisition was to broaden its portfolio and move away from a domestic focus.

Beam Suntory is formed

01 May, 2014

Suntory Holdings has completed the acquisition of Beam, which will now be called Beam Suntory.
Suntory Liquors Limited, which includes Yamasaki, Hakushu, Hibiki, Kakubin, Bowmore and Midori, will be folded into the new Beam Suntory by the end of this year.
Suntory paid $83.50 per share of Beam. The combined Beam Suntory now the takes the number three position in the global premium spirits market, the company claims.
Beam Suntory will be headquartered in Deerfield, Illinois and led by Chairman and Chief Executive Officer Matt Shattock, who has been CEO of Beam since 2009.
Beam Suntory aims to achieve growth in markets worldwide, particularly the US with its strengthened global distribution network.
Matt Shattock, chairman & CEO of Beam Suntory said: "By combining the world leader in bourbon and Japan's leading spirits company, we have created a stronger global business with an even better premium portfolio.
"The company's portfolio is led by its flagship brands Jim Beam and Yamazaki, as well as world renown premium brands including Maker's Mark, Knob Creek, Hakushu, Hibiki, Kakubin, Teacher's, Laphroaig, Bowmore, Canadian Club, Courvoisier, Sauza, Pinnacle and Midori.
"We will be focused on continuing our momentum, growing in developed and emerging markets, and building on our combined strengths.  Those strengths include a dynamic portfolio across key categories, powerful routes to market and passionate people.  
"I'm particularly excited about what brings us together - a strong cultural fit based on the entrepreneurial and innovative spirit of two companies with common values and proud heritages rooted in multi-generational family businesses. We look forward to learning from each other and to creating a future of exciting growth for our business and opportunities for our people."
Nobutada Saji, president and chairman of Suntory Holdings, said: "I am very delighted with the launch of Beam Suntory, which unites Beam and Suntory's spirits businesses, and I truly believe Beam Suntory will continue to grow strongly in the global spirits industry.
"Since its founding, Suntory Group has always shared the spirit of 'Yatte Minahare - Go for it!' in taking on new challenges, creating new opportunities, and living our corporate values.  Beam's heritage of over 200 years is also characterized by a spirit of entrepreneurialism, creativity and courageous decisions that exemplify the same 'Yatte Minahare' spirit.  
"I believe this common spirit and our combined strengths will be a powerful driving force as the new Beam Suntory excites consumers around the world with our portfolio of premium brands.  At the same time, Beam Suntory will remain true to Suntory's corporate philosophy, 'In Harmony with People and Nature,' in developing a rich experience of life based on real needs in the communities  in which we do business, coexisting with people and their nature surroundings.


01 February 2018
Beam Suntory master blender and strategic inventory manager Ron Welsh might never have made it into whisky, but for the decline in the steel industry. He took a job at Strathclyde grain distillery – and hasn’t left Scotch since. He tells Gavin D Smith about working with industry legends, cask experiments and his passion for rugby.

Ron Welsh Beam Suntory
New direction: Ron Welsh worked in the steel industry before entering the world of whisky
‘I was born in Paisley, near Glasgow, and my father was financial director for what was then Coats Patons – the sewing thread manufacturer. When I was a boy Coats was still a very large employer in Paisley, with two mills still working in the town.

‘For the first six years of my life I travelled abroad a lot with my family, as my father was involved in setting up new factories in various parts of the world. In the early 1960s, when I was very young, my two brothers and I were taken to Venezuela and Argentina, and later we lived in Portugal.

‘When we came back to Scotland I finished my schooling and then studied at Strathclyde University for a chemical engineering degree. In 1983 I went into Ravenscraig Steelworks, near Motherwell, operated by British Steel.

‘There were 6,000 employees at Ravenscraig when I went there, but that had been run down quite a bit already. Latterly I was casting manager, but left in 1991 as they were running the plant down prior to closure.

‘I was lucky enough to be able to go back to university and took a Master’s Degree in information technology, but unemployment in Lanarkshire became a big problem, which continues to this day.

‘When I graduated, I looked around for an IT job, then took a shift manager’s role at Strathclyde grain distillery in Glasgow, which was owned by Allied Distillers. I was there for seven years, and worked closely with the legendary master blender Robert Hicks and with Sandy Hyslop, now Ballantine’s master blender and director of blending, on spirit quality, and began to get involved with quality control.

Ron Welsh

Tough decision: Ron Welsh was involved in the closure of Dumbarton grain distillery in 2002

‘I then took on a project role looking at Allied Domecq’s grain distillation capacity, mapping out the future. We had Dumbarton and Strathclyde grain distilleries, and I was partly responsible for the decision to close down Dumbarton, which happened in 2002.

‘It wasn’t a decision that was taken lightly, but there was an over-supply of grain whisky at the time and the spirit from Dumbarton was more expensive than the alternatives, partly as the distillery was quite manually intensive.

‘Robert Hicks was responsible for making changes to the brand recipes to work with Strathclyde, Girvan and North British grains. In terms of Allied’s brands at the time, we were talking principally about Ballantine’s, Teacher’s and Long John blends.

‘I then went to Kilmalid to the bulk stocks department, where I was involved with planning new fillings and cask selection for all our blends and single malts, under the tutelage of Robert. We discussed blend recipes – which malts we’d replace if and when we ran out of some – and it was a great grounding.

‘Then I got into nosing blends prior to bottling, working with samples in the lab, which led me on to the path I’m currently on. I did that from 2000 to 2005, then Pernod Ricard and Fortune Brands bought Allied Domecq, and I moved over to Fortune Brands, where I carried on pretty much the same role as previously.

Bowmore casks

Bowmore casks: Welsh has been involved with the Islay distillery since 2014

‘Before Allied was taken over, Robert Hicks had the idea of finishing some single malts in quarter casks, after initial Bourbon cask maturation, and I sourced the quarter casks from the Speyside Cooperage.

‘This was 2003/4, and we tried doing it with all the single malt brands we had at the time, but it worked best with Ardmore and Laphroaig. It gives a unique twist to a single malt, particularly peated ones like those. You get coconut notes coming over from the quarter casks, which works really well with the peat.

‘Beam was bought by Suntory in 2014, which meant Ardmore, Laphroaig and Teacher’s joined the Morrison Bowmore Distillers brands – Bowmore, Auchentoshan and Glen Garioch. A new structure was put in place, with me taking over inventory management and spirit quality, with Rachel Barrie reporting to me.

‘When Rachel was appointed master blender with BenRiach I mused on whether we should take on an established master blender or change my role so I could do it. I opted for the latter, and for me, the really exciting part of the job now is being master blender. I’ve been responsible for creating all new expressions of Laphroaig and Ardmore since 2009, and now I have the whole portfolio.


From the air: Ron Welsh has created all new expressions of Laphroaig since 2009

‘With Laphroaig I came up with various new expressions, including QA Cask – finished in charred American oak casks, 1815 Edition – matured in first-fill Bourbon barrels and new European oak hogsheads, and Select – for which the cask recipe includes oloroso Sherry hogsheads, white American oak barrels, Pedro Ximénez hogsheads, quarter casks and first-fill Bourbon casks.

‘For years, Laphroaig was only filled into ex-Maker’s Mark Bourbon barrels. That was all you had. Robert Hicks started doing Quarter Cask and Triple Wood as ways of changing the profile of expressions of Laphroaig, and that continued with PX – which used American oak casks, quarter casks and Pedro Ximénez casks.

‘From 2006 I started filling Laphroaig into some different casks, and this resulted in Lore – matured in five different cask types. It was the first time we had Laphroaig that had been filled into different casks from the start, rather than just a finish, and I felt that was an achievement.

‘I’m also really pleased with Laphroaig 18-year-old. I said we should go from 15 to 18 years old, and it’s been very well-received. That was another of the expressions I developed.

‘Rachel had already created some new Bowmores, including the 15-year-old for travel retail, and I’m just carrying them forward. When it comes to Auchentoshan, it’s very easy to get new flavours through different cask types and previous contents, because of its style.


Sense of continuity: Welsh is carrying on Rachel Barrie’s work with Bowmore

‘I’ve developed with the winning bartenders a second edition of the Bartender’s Malt, which is due to be bottled in April, and there are another couple of new expressions I’m desperate to get out there. Chapters 3 and 4 of the Glen Garioch Renaissance at cask strength will also be bottled before too long.

‘In terms of actually drinking whisky myself, I had my first one when I was 18 in a working man’s pub in Ardrossan, Ayrshire after a wedding. It was probably Whyte & Mackay, and I didn’t have another whisky for several years after that!

‘When I did, I was working in the industry, and it was Ballantine’s 12-year-old – not at all fiery, and well-balanced. I was just an occasional whisky drinker then, and I still am, really.

‘I enjoy Bowmore 15-year-old – which used to be called Darkest, and Auchentoshan Blood Oak from its travel retail range. With Laphroaig, it has to be the 18-year-old, but it’s no longer available.

‘When I’m not working I spend time with my family – I have two school-age children – and my great passion is international rugby. I try to get to a couple of games in each Six Nations championship, so this is an exciting time of year for me.

‘The Six Nations in 2018 is there for the taking by Scotland. When they win the championship in Rome, I’m glad I’ll be there to see it!’
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