SOUTH KOREA – British alcoholic beverage company Diageo has agreed to sell its premium Scotch whisky brand, Windsor, to Bayside/Metis private equity group, for KRW 200 billion (about US$162 million).
Launched in 1996, Windsor is a blended scotch whisky of exceptional quality, containing an exclusive selection of fine grain whiskies and precious malt whiskies, according to Diageo’s website.
Diageo notes that the whisky is made using malt whisky from the Royal Lochnagar distillery – the brand home of Windsor Scotch Whisky.
As part of the agreement, Diageo will supply Scotch whisky to Bayside/Metis under a 10-year supply agreement
“This transaction marks the next chapter for Diageo Korea,” said Sam Fischer, president of Asia Pacific and global travel for Diageo.
We remain fully committed to the market and further developing our international spirits and beer business, which is being driven by premiumisation and consumer interest in categories like international whisky.”
Fischer further revealed that the acquisition was “very much in line with our track record of active portfolio management.”
“We are grateful to our Diageo Korea employees for all their dedication and support of the Windsor business, and we will work with them, the Union, our valued customers and partners, and Bayside/Metis to ensure a smooth transition,” he added.
Diageo’s sales come at a time when declining scotch sales rebounded in 2021 thanks to increase at home drinking.
According to the data from the Korea Customs Service, the value of whisky imports came to US$93.21 million in the January-October period, up 73.1% from a year earlier.
The spike represents the first on-year increase in the country’s whisky imports since 2014 and, according to industry sources, the surge is down to the growing number of people drink at home.
South Korea’s whisky imports had reportedly been waning since peaking at US$264.6 million in 2007.
The downturn followed the implementation of the country’s anti-graft law in 2016 and a 52-hour workweek in 2018.
Even with the previous decline in sales, Scotch still makes up around 40% of the overall whisky market in South Korea and the renewed demand for the drink will be a boon for both local and foreign players.
Bum Jun Kim, CEO of Bayside Private Equity for Bayside/Metis added: “Windsor is an important addition to our investment portfolio and allows us to participate in the dynamic Korean beverage alcohol market.
We are confident that we can build on the innovation of Windsor and unlock further potential. We will work closely with Diageo to ensure a smooth transition over the next few months.”
Diageo expects the transaction to have no material impact on earnings per share in Fiscal 22 as it will be closed in fiscal 2023.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE