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Issue 7 - Barrel Boom brings distillery gloom.

Whisky Magazine Issue 7
December 1999

 

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Barrel Boom brings distillery gloom.

The bourgon barrel industry is on a roll, but that's not good news for the whisky industry Richard Neill reports on tough choices and smart solutions.

New moves in the rum and tequila industries rarely cause more than an eyebrow twitch in the boardrooms of Scotch whisky distillers. After all, the arrival of the latest 'slammer in a can' or 'ready-mix mojito' is hardly the stuff of a whisky-maker's nightmares.

But recent developments in Mexico and the Caribbean have prompted a jangling of worry beads in even the most confident corners of Speyside. The successful re-invention of rum and tequila as premium sipping material – some tequilas sell for $50 (£31) a shot and upwards in the US – has provoked more than new rivalry at the bar. There's now unforeseen competition for one of the most crucial elements in whisky production – bourbon barrels.

And to these new barrel migrations can also be added another factor – the general decline in bourbon sales. Together they lead to a shrinking stock of used bourbon barrels. Then there is the continuing rise of sherry cask prices. All in all you can understand why the Scots are counting their wood stocks a little more carefully these days.

Unlike the wine industry where rising barrel prices have been met with the growing use of chips and staves to provide oak flavour cheaply, the whisky industry has no such barrel -on-a-budget option. To be able to use the term 'Scotch whisky' on the label, by law the spirit has to have been aged in oak casks for a minimum of three years. Fluctuation in the supply and price of wood therefore has important implications for
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