WHISKY giant Chivas Brothers has said the distilling giant is gearing up for the “disruption” a no-deal Brexit would bring, while warning Scotch could be affected if the US imposes tariffs on imports of European spirits.

But it declared the long-term growth prospects for whisky around the world will not be impeded by the current upheaval caused by Brexit.

Top executives of Chivas owner Pernod Ricard briefed journalists yesterday at the distiller’s new head office on Glasgow’s Blythswood Square, which is now home to around 200 back office staff who have moved from its former headquarters in Paisley.

Th maker of Ballantine’s, Chivas Regal and Royal Salute is shifting its bottling operation from Paisley to a “state of the art” facility in Dumbarton, where it has invested £50 million in its Kilmalid site. The Kilmalid plant will be fully operational next year.

Asked whether the distiller has prepared for a no-deal Brexit, Chivas chief executive Jean-Christophe Coutures, who appeared alongside executive chairman Alexandre Ricard and Christian Porta, chief executive for Europe, the Middle East, Africa and Latin America, said: “I can’t comment on the outcome of it (Brexit). The only thing I would say is that, as a business, what we want is visibility. It is very difficult to forecast and to plan for the unknown.

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“Now we are firmly preparing for a no-deal Brexit, with the expectation that there will be a deal. It has always been our position, but we have to prepare for the worst.”

Mr Coutures said the distiller’s preparations involve ensuring it has sufficient supplies of glass, bottle closures and labels.

He noted: “We are lucky enough in Pernod to have a very strong distribution network of sister companies, and in the last six months we have been moving finished goods inventory for key markets and SKUs (stock keeping units), in particular the European Union, by increasing all inventory in those markets. It doesn’t impact our sell out terms, because it is internal (movement).

“The other point which is important to note is that we hardly use trucks in Chivas Bros. We mainly use ports and boats to transport our products, so we believe will be in a better place than others in that context.”

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Observing that it was impossible to predict the outcome of the political crisis, he added: “The only thing I know, [is that] we are ready, and I am firmly of the view that Scotch, no matter what, will continue growing, and I don’t expect any slowdown because of Brexit. I think the dynamics of the category remain extremely positive.”

However, Mr Ricard said there could be an effect on Scotch and Irish whiskey exports if US President Donald Trump moves to impose tariffs on imports of European spirits.

He said: “The US is a huge market for European spirits, particularly for Scotch, Irish (whiskey) and Cognac, so it would have somewhat of an impact of course.”

Mr Ricard declared the distiller’s Scotch whisky portfolio continues to be “big driver” of the firm’s financial performance. Pernod reported organic profit growth of 8.7 per cent in its 2019 financial year, underpinned by growth of 6% on Chivas Regal, 7% for Ballantine’s, 9% for The Glenlivet and 16% for Royal Salute.

Mr Ricard said: “Let’s be very clear: our Scotch business, which is the biggest part of our portfolio, is driving that growth, and we are extremely happy about it.”

While he observed that the 10.8% growth in exports reported recently by the Scotch Whisky Association, to £2.19bn in the first half of 2019, reflected stock-building by some distillers, he said Pernod’s figures did not.

Mr Ricard said: “Unlike us, a lot of our competitors don’t have... sister companies in (other) markets. It means they have been pushing inventories to third parties, which impacted, eventually, their sell-out.”

He added: “In those (Pernod) numbers, it is genuine numbers. Brexit or not Brexit, the numbers would have been exactly those.”

Mr Ricard downplayed the effects of the Hong Kong protests on sales in the special administrative region. He noted that the Hong Kong market is relatively small, and the only disruption occurs when the airport has been closed and sales of whisky are impeded in travel retail stores.

Mr Ricard said the potential for exports to China remain strong, noting that on the basis of demographics, urbanisation trends and demand for whisky and Cognac, he is confident of achieving sales growth in high single digit to low double-digit percentage terms “for the foreseeable future”.

Mr Coutures outlined Pernod’s commitment to invest £500m per year in Scotch whisky distilling, manufacturing and logistics. The investment includes plans to upgrade the visitor experiences at The Glenlivet and Strathisla distilleries on Speyside.

With regard to Strathisla, the “oldest commercial distillery” on Speyside, Mr Coutures said the aim is to “bring to life the story” of Chivas and the distillery. “Our approach will not be to do something large scale, with a multi-hundred-million [pound] investment, but to respect the distillery as it stands,” he said.

He added that plans for The Glenlivet will allow visitors to enjoy aspects of Scottish nature.  He did not provide a precise figure on visitor centre investment.

The company is targeting reducing the carbon emissions of its distilleries by 50% by 2030.