Diageo faces storm over Cardhu make-up

[cowdery]

From JustDrinks.com

A storm is brewing in the Scotch whisky industry over a decision by Diageo to change the composition of its whisky brand Cardhu.

The company has changed the brand from its traditional 12-year-old single malt make-up to a mix of vatted malts. However, it is still selling the Scotch under the same name, changing only part of the labelling to "pure" malt instead of "single" malt.

The decision has prompted great concern and criticism among parts of the drinks community, because of fears it will damage the reputation of the Scotch industry.

Diageo's opponents argue that the new whisky should not be sold as Cardhu, the fifth most popular brand in the world, because it misleads consumers.

A report today in the Scotsman, quoted rival Allied Domecq as denying rumours that it was close to quitting the Scotch Whisky Association over the body's inaction on Diageo's move.

The Scotsman quoted an Allied spokesman saying there was "no truth in the rumour whatsoever".

However the spokesman added that Allied is "extremely concerned about this issue and the reputation of single malt".

In its defence, Diageo says it had been forced to make the change because it is running out of Cardhu.

Peter Smith, Diageo spokesman, told the BBC earlier this week: "We have to respond to consumer demand because in countries such as Spain, Italy, Greece and France, we are seeing a great demand for Cardhu and twelve years ago we never dreamt that would happen.

"We should be celebrating success but we just don't have the stocks, so we are going down this route of introducing - in selected markets - Cardhu which is Cardhu Pure Malt, which is an accepted practice within the industry."

[cowdery]

I found this interesting because it's not the first time recently that I have heard about this sort of thing. Apparently, the demand for certain brands is seriously outstripping supply. Nice problem to have.

[ratcheer]

I won't buy more or less because of the change. I have heard of Cardhu, but have never seen it.

But, as to the demand outstripping the supply, surely they must have considered that making such a controversial change might cause the demand to go down. Possibly way down.

Remember "New" Coke?

Tim

[OneCubeOnly]

I wonder if that will change the makeup of JW Black...as their website boasts that Cardhu is "vital" for the "silkiness"!?

[cowdery]

Follow-up from JustDrinks.

The decision by Diageo to alter the contents of its Scotch brand Cardhu is continuing to cause controversy.

Diageo, because of what it says are a shortage of stocks, has changed Cardhu from a single malt into a vatted malt. However, opponents of the move claim consumers are being mislead because the packaging for the brand has remained almost unchanged.

The independent Scottish family-owned distiller William Grant & Sons has once more lodged its opposition to the move. In a statement released to today it welcomed the news that Diageo had publicly agreed not to turn any of its other brands marketed as single malt into vatted malts.

However its said it is urging Diageo to reconsider its decision to turn Cardhu into a vatted malt.

"This move, which has caused outrage across the Scotch whisky industry, is unprecedented and will seriously undermine the integrity and authenticity of the single malt category," it said in a statement released yesterday.

Deputy group managing director of William Grant & Sons Ltd Tony Hunt: "By adopting a policy for short term financial gain, Diageo may cause irrevocable long-term damage to the single malt category as consumers around the world begin to question the integrity and provenance of other single malts.

"Other malt whisky companies have sometimes failed to forecast demand 12 years ahead. These companies have taken the long-term view, and either removed their age statement or rationed the stocks available for sale for a while."

"Diageo is the first company who have simply decided to bottle a mixture of other malt whiskies using the existing brand name of a Single Malt Whisky. Once Diageo has done this, any other distiller short of stock could follow suit. It has taken fifty years to build the Single Malt category to its current value, and it is incredible to think that this value could be thrown away by Diageo," he said.

In the statement, William Grant said that despite some claims to the contrary, Cardhu Pure Malt, a vatting of any number of single malt whiskies from various Diageo sources, is now available in the UK, and has also been spotted in France, Hungary, Austria, Greece and Spain, Cardhu’s biggest market.

The momentum behind the 'stop Cardhu' campaign is gathering pace in official circles as well. Alex Salmond, former leader of the SNP said at the weekend: "It is probably the most foolish thing I have seen in the whisky industry for 30 years. It seems to be sacrificing long-term consumer confidence for short-term profit."

Meanwhile, a Scottish Labour MP put forward a parliamentary motion calling for a halt to the current methods being used to market Cardhu "pure malt".

Mark Lazarowicz, MP for Edinburgh North and Leith, said yesterday that his motion in the House of Commons had already gained support from a handful of English and Scottish MPs, including both Labour and Liberal Democrats.

[Dave_in_Canada]

Not new news, but a welcome update on the story:

Tue 09 Mar 2004

Diageo scraps Cardhu Pure

By Dominic Roskrow

Diageo today sensationally announced that it is to withdraw its

controversial Cardhu Pure vatted malt and replace it once more with Cardhu 12 year old single malt by the end of the year.

And although the company denies that the move marks a U-turn, it accepts that its decision is to a great extent due to the huge opposition from the public to the company’s repackaging of a single malt as a vatted one.

The pure version will be phased out by the end of the year and the single malt will be made available in selected territories including Spain, where it is the leading malt brand.

Diageo says that it is responding to public will but is also pre-empting an announcement on labelling in general. It has been in talks with the Scotch whisky Association and is supporting a move to clear up definitions to make it clearer for consumers. Among the proposals is a ban on the use of an existing distillery name for anything except a single malt from that distillery.

Such a move would ‘outlaw’ Cardu Pure.

Announcing the changes Dr Nicholas Morgan, marketing director for Classic Malts at Diageo, said he was very proud that the company had worked as a team over Cardhu, been big enough to listen to the industry and whisky drinkers, and acted accordingly.

“Some people may see it as a u turn and others may try and claim credit for this change,†he said. “But we are in a different place from when this all blew up last year. We have moved on and no-one made this decision except ourselves.

“The only mistake we made was to underestimate how strong feeling among the public would be. We’re very sorry we caused so much upset and we apologise for offending people over the issue.

“But we believe that we are acting in the interest of everyone by taking this decision.â€

Diageo does not rule out other innovative moves in the malt sector in the future, and Dr Morgan hinted that a new vatted product would be launched in a period of about a year from now and that the company intended to be at the forefront of a sector which it believes could be massively instrumental in bringing new drinkers to the Scotch malt whisky market.

Excerpted from http://www.whiskymag.com/news/1273.html