SWA = OPEC?

The scotch whisky world is all a flutter with changing international markets. There's a growing demand for scotch in India and China, without enough scotch available to meet expected demand. Many distilleries are ramping up production and beginning to release single malts without age statements (allowing them to combine younger and older whisky together to make it taste mid-range) . A lot of the industry's stress comes from one guy: Vijay Mallya, the Indian billionaire who bought Whyte & Mackay last year. From what I've read, whisky isn't very regulated in India, with some local producers even making "whisky" out of sugar. Mallya wants the Scotch Whisky Association, the powerful industry group that helps regulate and standardize whisky production from Scotland, to accept changes such as allowing additives and flavorings that will appeal to the growing affluent youth market in India. The idea of the SWA allowing flavored whisky is just laughable. This is not a progressive organization. It's all heritage, heritage, heritage. But some of the comments Mallya made the SWA may like after all. From a story in The Scotsman:

Mallya now controls about 60% of the Indian whisky market following his £595m acquisition of Whyte & Mackay last May. Since that acquisition the price of bulk whisky has risen considerably as the widespread practice of selling whisky for cheap own label blends has stopped. Mallya said he liked the idea of prices staying high and called on the SWA to restrict production, much like the Opec countries do with oil. He said: "Over the last few years we have seen the price of whisky rise. Well, why don't we keep it that way? The SWA could become a value custodian. "In the past we have seen overproduction ruin the profitability of the industry, one way we could prevent this is by restricting production. Opec does it."

I'm heading off to Scotland in May for a big press trip. I can't wait to hear some of the responses the distillers have to this. For further reading, check out the latest issue of Malt Advocate magazine. They address the scotch whisky boom and its consequences.