2 Sept – Diageo, one of the world's major drinks companies, has said its production costs for its whiskey division are likely to surge by 5% this year – almost double compared to the previous year.
Rising energy, grain and glass costs are the drivers behind the increase, said Brian Donaghey, Managing Director of its Scottish operation. In 2007, its output costs rose by 3%.
Mr Donaghey explained, however, the company was “cushioned” against the current commodity market volatility since its drink was matured for up to 18 years.
The company also admitted that while it sources 90% of the grain used for its whiskey from Scottish producers, it may be forced to buy from foreign suppliers this year. A cool and rainy summer means the Scottish malt barley harvest has been delayed, meaning supplies could be bought in from Scandinavia or England.