United Spirits Likely To Source Scotch From Diageo

By Richard Thomas

In a move to ensure its future whisky supplies, India’s United Spirits has reached an agreement on long-term sourcing with international drinks giant Diageo. Pending final negotiations, Diageo will pick up supplying United Spirits brands such as Bagpiper, Signature, and Antiquity with scotch whisky for blending when the Indian company’s current contract with Whyte & Mackay expires in 2017.

United Spirits was the owner of Whyte & Mackay until said ownership became a stumbling block in Diageo’s acquisition of the Indian drinks company. Whyte & Mackay was sold to Emperador last month, and as part of the deal it was agreed they would continue to supply United Spirits with scotch whisky in the short term.

Most of the Indian whisky brands in the United Spirits portfolio are internationalized blends, using a mixture of imported scotch whisky and locally made whisky, and sometimes other spirits that most likely would be definied as vodka and rum outside of India. Although it might seem natural that Diageo, owner of top scotch brand Johnnie Walker, might step into the gap as United Spirits supplier, that was not necessarily a foregone conclusion given Diageo’s own whisky supply problems. Demand on stock has forced Johnnie Walker to abandon Green Label and shift Gold Label to no aging statement (NAS) status, as well as other changes in Diageo’s various scotch brands.