Diageo to build a $75 million distillery in China
Through this distillery, the world’s number one drinks group, Diageo, will make its first Chinese single-malt whisky.
Diageo (DGE.L) announced Tuesday, Nov. 2, that it is building a $75 million distillery in China to make its first Chinese-origin malt whisky. With China being the largest spirits market in the world, Diageo is looking to tap into the growing demand for the spirit in the country.
Located in the country’s southwestern Yunnan province, the 66,000-square-meter distillery will be supplied by water from Erhai Lake and will begin construction next year.
Single Malt whiskies are one of the few drinks that Chinese consumers enjoy at home or in small groups, and their volume will increase by 20% by 2020, according to wine and spirits consultancy IWSR, which adds that it is also the drink of choice among its large population of millennial consumers.
COVID-19-driven restrictions on overseas travel have also saved people money and fueled a growing fondness for high-end spirits.
In July, whisky maker Johnnie Walker reported that double-digit growth in Scotch whiskies contributed to a 38% increase in net sales in Greater China in its fiscal 2021, ended June 30.
“Demand for Scotch is growing rapidly among middle-class consumers who are keen to continue to discover and enjoy the finest whiskies,” said Sam Fischer, president of Diageo Asia Pacific and Global Travel in a statement.
The company also said the site of the distillery, called Diageo Eryuan Malt Whisky Distillery, will be carbon neutral when it opens.
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