By Scott Wright

THE chief executive of Scotch whisky giant Chivas Brothers has underlined the strength of its recovery in key European markets, but warned that current supply chain difficulties are leading to missed opportunities.

Jean-Etienne Gourgues said sales have been boosted by the re-opening of the on-trade in major whisky countries such as Spain and the UK, declaring that people are “enjoying the moment” after being “deprived” of visiting bars and restaurants during lockdown.

But he told The Herald that supply chain disruption, caused by factors such as the shortage of HGV drivers and shipping delays, are undermining its ability to capitalise on the resurgent demand.

Mr Gourgues said: “It’s a bit of an issue because it is much longer to be able to ship to Spain than what it used to be. We used to have a two-to-three day average lead time, now we have 15 days.”

Noting that the longer lead times were coinciding at a time of high demand, with re-opening happening quicker than anticipated, he added: “We are still [seeing] very strong figures, but at the same time we are missing a bit of opportunities because of that. That is entirely related to transport.”

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Building on the theme, Mr Gourgues said there are difficulties involved in finding vehicle drivers, and that the “sea shipments between Scotland and the UK, let’s say to Spain, are still very limited, and the routes are a bit shaky.”

His comments follow media reports in Spain last week which suggested bars were running out of whisky, gin and other British drinks because of a Brexit “hangover”.

Asked if the supply chain challenges at Chivas were related to Brexit, Mr Gourgues that the issues were of a global nature, and put the challenges down to a combination of driver shortages and infrastructure weaknesses.

He said Chivas was trying to ease the problems by introducing more flexibility to working patterns at its bottling line in Kilmalid, Dumbarton, where it employs 824 people. Weekend and night shifts have been introduced for the first time, and there are more times available for trucks to collect stock.

Mr Gourgues, who succeeded Jean-Christophe Coutures as chief executive in July, does not expect the difficulties to ease soon. “There is a limitation to what we can do,” he said.

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Mr Gourgues was speaking from Glasgow, where he was attending COP26. He welcomed the fact that the climate summit has put the “spotlight on Scotland”.

Asked if he thinks the Scotch whisky industry is doing enough to combat climate change, he said Chivas has a target of becoming net zero in terms of emissions from its operations by 2026.

The Scotch Whisky Association has committed the wider industry to becoming net zero by 2040 under its new sustainability strategy, while Scotland as a whole is aiming to get there by 2045.

Mr Gourgues said: “It is the role of the private companies to lead the charge on that.”

Mr Gourgues, who was previously managing director of Pernod Ricard China, declined to say how much Chivas was spending on climate change measures. But he said it was making a “very significant investment” in reducing the impact of its 14 distilleries, each of which have their own “microclimates” and have to be treated “one by one”.

Much of the impact reduction will come from switching to biogas from fossil fuels as a power source.

Braeval, which makes single malt for Chivas Regal, has already become the company’s first zero carbon distillery following a switch to a rapeseed residue-based bio-fuel. The fuel is now scheduled to rolled out to the Glentauchers distillery, where mechanical vapour recompression fan technology has been adopted to cut energy use.

Mr Gourgues said: “The roadmap is clear, the technology is working. It is a question now of scaling and rolling out those plans, distillery by distillery, and taking into account local [conditions[.”

Last month, Chivas owner Pernod Ricard hailed a “very dynamic start” to its current financial year, after seeing sales rise by 20 per cent to €2.72 billion in the first quarter.

Mr Gourgues said sales were now progressing on a “higher trajectory” than they were before Covid, but noted the duty free market was “still quite far away” from pre-pandemic levels.

Mr Gourgues said the suspension of US tariffs on imports of single malt Scotch whisky in March has given “confidence to the trade” in terms of how approaches the market.

“Step by step it will improve,” he noted.