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Master of Malt Blog

Tag: China

Take a virtual tour of Pernod Ricard’s single malt distillery in China

Work has finished on Pernod Ricard’s single malt whisky distillery in China which cost $150m. Now you can have a tour of this spectacular new facility (virtually.) Hot on the…

Work has finished on Pernod Ricard’s single malt whisky distillery in China which cost $150m. Now you can have a tour of this spectacular new facility (virtually.)

Hot on the heels of Diageo’s announcement of its own Chinese whisky distillery, it seems that Pernod Ricard’s single malt whisky distillery in China is finished, after just over two years. Called The Chuan Malt Whisky Distillery, it’s in Emeishan in the Sichuan Province and shows a commitment of $150m by Pernod Ricard.

We are still waiting for final confirmation of technical details but from the virtual tour, you can see that it’s a spectacular facility in stone and concrete with more than a touch of Bond villain lair meets luxury spa about the place. You can take a tour here. There are eight stainless steel washbacks and two quite short stocky stills which appear to have come from Forsyths of Rothes with shell and tube condensers.

The Chuan Malt Whisky Distillery

Ah Mr Ricard, I’ve been expecting you

Not just a distillery but a cultural icon

But this isn’t just a distillery. Oh no. Designed by Chinese architectural firm Neri&Hu, according to the press release, it is meant to be a “cultural icon.” The name Chuan “is a matrimony of two exquisite characters steeped in the local terroir and culture, with the “rich and layered” meaning of 叠 (the) and “river” in 川 (chuan) from Sichuan”. So now you know. There will also be a permanent art programme including “an installation by Zhan Wang, one of China’s most celebrated contemporary artists.” The visitor centre will open in 2023 and Pernod Ricard aims to attract two million tourists in its first ten years open.

As you’d expect from a new distillery, there’s the usual sustainability stuff. It aims to be carbon neutral, taking most of its energy from renewable sources and 100% of the waste water will be recycled. The distillery itself apparently made use of recycled material in its construction. 

We don’t know whether any barrels have been filled yet but according to Philippe Guettat, chairman and CEO of Pernod Ricard Asia “our mission is to bring to life the most iconic malt whisky made in China.” It seems it’s very much going to be in a Scotch malt whisky style as the master distiller Yang Tao is working with his counterparts in Scotland. What all this means for the original Scotch whisky in the Chinese market is anyone’s guess. 

You can take the virtual tour here.

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Diageo to build single malt whisky distillery in China

Diageo has announced that it will be building a US $75 million single malt whisky distillery in Eryuan County in Yunnan Province. Exciting news, but what does this mean for…

Diageo has announced that it will be building a US $75 million single malt whisky distillery in Eryuan County in Yunnan Province. Exciting news, but what does this mean for the future of Scotch whisky in one of its biggest export markets?

Back in September 2019, we reported on Pernod Ricard’s plans to build a US$150 million whisky distillery in China. Now, two years later, we have Diageo’s response. Called the Diageo Eryuan Malt Whisky Distillery, it will be a 66,000 sq metre (710,000 sq ft) single malt distillery with tourist facilities located in Yunnan Province in southwest China, near Tibet. 

The Diageo Eryuan Malt Whisky Distillery, barrel room

The spectacular proposed barrel room

High altitude distilling

Ground was broken on the project on 2 November and construction is planned to start in 2022, while it’s scheduled to begin distilling in 2023. The site is at a high altitude, over 2,100 metres above sea level, and apparently, it was chosen partly for its plentiful supplies of spring water. In line with Diageo’s Society 2030: Spirit of Progress initiative, the distillery aims to recycle all the waste water, produce zero waste and be carbon neutral.

President of Diageo Asia Pacific and global travel, Sam Fischer explained: “China is the world’s largest beverage alcohol market, and the demand for whisky is growing rapidly among middle-class consumers who are keen to further discover and enjoy fine whiskies. Today we celebrate another significant step forward, and one which builds upon our local insights and combines those with Diageo’s global whisky expertise in order to delight the next generation of Chinese whisky consumers. The natural surroundings and the Eryuan landscape will allow us to craft a world-class, China-origin, single malt whisky that will capture the imagination of premium whisky lovers in China.”

This isn’t Diageo’s first whisky initiative in China. Back in April 2019, it created Zhong Shi Ji whisky in collaboration with a Chinese baijiu producer, Jiangsu Yanghu, which it described as “premium taste of east and west.”

The Diageo Eryuan Malt Whisky Distillery, visitor centre

Artist’s impression of the visitor centre

What does this mean for Scotch whisky?

China is a $1.7 billion whisky market, and much of it comes from Scotland. This new distillery does rather beg the question as to what happens to Scotland’s premium brands when products from Diageo’s (and Pernod Ricard’s) distilleries go on sale.

We published an article by Ian Buxton in 2019 on Pernod Ricard’s Chinese venture which now looks alarmingly prescient:

“The more drinkers are persuaded that great whisky can be made anywhere in the world, the more that Scotch whisky’s premium cachet and exclusivity will fade. This is the start of a very slippery slope and today’s confidence can all too easily be revealed as tomorrow’s complacency.”

Only time will tell whether he is right or not.

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Could Chinese single malt whisky be a Trojan Horse?

The whisky world is full of excitement at news that Pernod Ricard has begun work on a single malt distillery in China. Ian Buxton, however, isn’t so sure this is…

The whisky world is full of excitement at news that Pernod Ricard has begun work on a single malt distillery in China. Ian Buxton, however, isn’t so sure this is a good thing for Scotch whisky. In fact, he thinks that this development might sound the death knell for the industry’s global dominance. 

As you will have read elsewhere, Pernod Ricard has recently announced that they have begun construction on a new single malt distillery in China. According to its press release, the Emeishan Malt Whisky Distillery represents “a potential investment of one billion RMB (US $150 million)” and the 13-hectare distillery site “will boast a state-of-the-art malt whisky distillation facility, due to begin production in 2021”.  Pernod Ricard has not given details of the anticipated production simply replying that “it’s too early to confirm a figure.” Speaking off the record, sources close to the project talk of two pot stills but with scope for expansion.

What are we to make of this news? Most commentators so far have done little more than breathlessly recycle the press release – which, to be fair, is pretty breathtaking. A Chinese single malt distillery, even an initially modest one, is a genuinely new idea and something which could fairly be described as radical, even epoch-making. Except it’s not actually a new idea. Back in 2014 in a book, The Science and Commerce of Whisky, I co-wrote with Professor Paul Hughes, then of Heriot-Watt University, I imagined the future thus:

“There now appears no technical reason why high-quality whisky cannot be produced in the most unfavourable of climates… [and] there would not appear to be any significant technical barrier to entry for new producers.… a new producer might emerge in, say, China utilising the latest technology…[and] enjoy cost advantages in production and shipping, potential protection within tariff walls and, with skilful marketing, patriotic support from a consumer able to purchase a product that looked and tasted like a high quality import at local market prices.   …established producers could be faced with significant competition. Why would our hypothetical new distiller not wish to compete for a share of a growing, profitable and fashionable market on their own doorstep?”

the Emeishan Malt Whisky Distillery

Artist’s impression of the the Emeishan Malt Whisky Distillery

Why not indeed? Let’s put to one side the dubious morality of doing business in one of the world’s most repressive regimes. Pernod Ricard certainly has, telling me in response to my enquiry, that “we have a presence in many different markets with many shifting political landscapes and therefore do not provide political commentary.” So sip the shark fin soup with your new partners and look away.

Or, simply weep for Scotch whisky, for what we see here is the first nail in Scotch’s coffin; a Trojan Horse if you will. Oh, don’t be absurd, you say. Stop over-reacting. Well, I don’t believe so. Certainly not next year, probably not for a decade or more, possibly not even in my lifetime, but this marks the beginning of the end of a once-dominant industry. 

Once upon a time we built things here in the UK – ships, for example, and televisions and all kinds of consumer goods. More pertinently, once upon a time, the Irish whiskey industry led the world. With the largest stills and the best-selling brands they were the giants of their day.  But it took less than fifty years for that hegemony to be utterly destroyed. History suggests that currently well-entrenched and dominant market positions are far from impregnable and Scotch and other ‘traditional’ producers would do well to consider potential challenges, not facilitate them.

Jean-Etienne Gourgues, Pernod Ricard's MD for China

Jean-Etienne Gourgues, Pernod Ricard’s MD for China

I don’t imagine for a moment that Pernod Ricard thinks it will end this way. With a market share of around 20% of global Scotch and substantial investment there, it certainly isn’t looking for a self-inflicted wound. Yet, this I believe is the probable long-term outcome of this spectacular Chinese venture. After all, as Pernod’s Jean-Etienne Gourgues, MD for China says “we’re going to be transferring our world leading whisky-making expertise to China” using “major process equipment [which] is sourced from Forsyths, the best-in-class in the distillation equipment industry.” 

The more drinkers are persuaded that great whisky can be made anywhere in the world, the more that Scotch whisky’s premium cachet and exclusivity will fade. This is the start of a very slippery slope and today’s confidence can all too easily be revealed as tomorrow’s complacency.

Perhaps the Bible has a lesson.  In 1 Kings 18:44, it reads: “And it came to pass at the seventh time, that he said, Behold, there ariseth a little cloud out of the sea, like a man’s hand. And he said, Go up, say unto Ahab, Prepare thy chariot, and get thee down, that the rain stop thee not.”

Perhaps it’s time for Scotland to buy an umbrella.

 

 

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