Sunday, April 8, 2012

The Deconsolidation Of Irish Whiskey Continues.

In 1966, all of the whiskey producers on the Emerald Isle became one company and consolidated production at two distilleries, Midleton in the South, and Bushmills in the North.

Both distillery complexes made both malt and grain whiskey using both pot and column stills. Bushmills made Old Bushmills and Midleton made everything else.

It stayed that way for more than 20 years and the company, which came to be known as Irish Distillers Limited (IDL), came to be owned by Pernod Ricard.

Then something amazing happened. The consolidation slowly began to reverse itself. In 1987, Dr. John Teeling founded a new distillery at Cooley in an old government-owned industrial alcohol plant. It too made malt and grain whiskey. It was successful.

In 1994, ownership of the Tullamore Dew Irish Whiskey brand was split off from IDL, but it continued to be made at Midleton.

In 2005, Diageo bought the Bushmills Distillery and the Old Bushmills brand from IDL.

In 2007, Cooley built a second (very small) distillery at Kilbeggan.

In 2011, Cooley was acquired by Beam, Inc.

In 2012, William Grant & Sons, owner of the Tullamore Dew brand, announced that it will build soon a new, $46 million distillery in Tullamore to make Tullamore Dew Irish Whiskey.

When that project is completed, there will be five distillery complexes in Ireland owned by four separate companies. Sadly, none are Irish-owned, but it does show that industry consolidation is not always a one-way street.

And don't feel too sorry for IDL. Its distillery at Midleton is still the biggest in Ireland and its leading brand, Jameson's, is still the number one Irish whiskey in the world. It has recently seen sales grow at a double-digit rate. Who knows, maybe Midleton will need to expand too pretty soon, or IDL will build another distillery someplace else.

American entrepreneurs, take note. You don't even need to start from scratch. The Charles Medley Distillery in Owensboro, Kentucky, is available. It needs some more work, and mostly new equipment, but the buildings are all sound, including seven warehouses with space for about 140,000 barrels.


Anonymous said...

Have you been to the Charles Medley Distillery in recent years? The fertilizer company on the property makes it almost unbearable to be in some of the buildings because of the smell. It makes me wonder what contamination will be left from all their chemicals.

Chuck Cowdery said...

I was there in 2009 and didn't notice any fertilizer smells.