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DEVIL'S ADVOCATE
or DON'T? Those of you of a certain vintage will well remember The Grand Old Duke of York—he who marched them up to the top of the hill, and then marched them down again. He was obviously fortified at the time, an early Diageo director, not hellish sure of what direction he was taking. His descendants, the Lords Blyth and MacFarlane, Prince Paul Walsh, and the jelly-wobblers who make up the non-executive Board at Diageo, have most certainly kept up the family tradition for indecisiveness and lack of leadership—giving in to a storm in a teacup instigated by those high moral guardians of the Industry, Wm. Grant and Morrison Bowmore! Next, the media. Column yards written by people who had little bloody idea what a single malt was, and absolutely no idea as to a vatted or blended malt—either of which may be, or not, “pure”! Then, an assorted collection of self-proclaimed ‘experts’, all wittering on about the dastardly deeds taking place regarding Cardhu. This would be the same Cardhu that 90+% of the great British public had never heard of before—far less tasted! Enter stage right the Director-General of the Scotch Whisky Association—two days into the job—caught like a rabbit in headlights, his plonker pulled by gutter-based media activists who finally took Grant’s for an alleged half million pounds in fees! Extras? Assorted politicians—from Holyrood, Westminster and Brussels, a star billing for “Teflon” Blair—doing his impersonation of the DG of the SWA—and you can see why this whole sorry mess provides hours and hours of genuine entertainment. Even I couldn’t make this stuff up! So what was it all about really? Well, we could blame the Spanish I suppose. They could not be persuaded to drink Walker Black Label. No, they had to be different. They liked the name Cardhu, the bottle shape, the packaging, and the advertising—oh, and they really didn’t mind the taste, especially served with half a glass of ice and topped up with Coca-Cola! Every malt distillery has a finite capacity. Sell an aged product—say, a 12yo—and 25% of what you distil and put in the cask disappears into the ether by the time you come to bottle it. Fact. Diageo well knew how much 12yo Cardhu they could sell—both in any current year and, indeed, going 12 years forward. All the stories of Diageo marketing types suddenly becoming aware of a problem are tosh. Of course they knew. I knew—I was there. The only problem Diageo had was an inability to persuade an ever increasing number of Spanish drinkers away from Cardhu and on to any of their other dozens of available whiskies. No, it was Cardhu or not at all as far as the rapidly expanding Spanish market was concerned. So what do you do? Traditionally, you would de-age the product thus generating more instantly useable stock and increase the size of the distillery to produce more stock—albeit that you have a fairly long wait for that stock to mature, all the time hoping that you can retain the demand despite having eradicated the age that helped sell the product in the first place. Mind you, tastes could change, the competition will wise-up and you could have wasted shareholders funds increasing capacity in an industry where there currently exists plenty of spare capacity anyway. Not so smart. Or you could think outwith the ‘traditional’. Produce a tailored product to keep your customers happy, maintain the age and quality, while not adding capacity that your company—the whole industry—does not need. If you then finish up with a product that has, to all intents and purposes, huge growth potential outwith the market it was originally designed for… well, you could be a hero! Four years ago, that was where the Diageo thinking was. It was, to quote a senior Vice President (no not me, he’s still there), “the single biggest potential profit earner we currently have. Nothing must stop this happening…” It was possible—and quite straightforward: change the distillery name back to what it was up until 1982—Cardow; register the name ‘Cardhu’ as a Vatted Malt; advise the Industry, individually as well as collectively through the SWA; tell the consumer; then make the change evident enough in packaging terms to avoid any possible charges of “passing off”; and you’re home and dry. Clever—eh? Diageo screwed up just about every one of these steps. They dawdled with the name change; they had TV cameras focused on Cardhu signage—as against Cardow; they gave the trade a couple of weeks’ notice of intent, without any preliminary discussions; they hardly changed the packaging and they tried to give a heritage to the word ‘pure’ that was errant nonsense. Add to that several abortive attempts to field spokesmen who weren’t talking drivel, and you can start to see where it went pear-shaped. Not only that, they never shot down the nonsense spouted by those dual guardians of Industry standards, Grant’s and Morrison’s. No matter that the Chief Exec of the former is now no more—gone presumably for wasting that half million of family money, or that the Chief Exec of the latter is currently off-loading his parent Company’s excess stocks into the Own Label market—at prices which make a laughing stock of the whole Industry pricing structure. Moral conscience of the Industry? Don’t make me laugh! The great mystery of course is that despite Diageo’s early blundering about, they had just about got the show back on the road. The negative PR had died away. More enlightened Industry observers had worked out that if malts were to become the new phenomenon of the new century, you cannot constrain yourself indefinitely to the capacity of the one existing factory. That’s not to say you don’t have distillery malts—of course you do. But just about every company in the Industry already has a vatted malt in their portfolio. Diageo were simply making Cardhu their mainstream vatted malt. Bottom line here is that if it’s not Cardhu it will sure as hell be son-of-Cardhu. Watch this space. Whether the ‘son of Cardhu’ will ever have the impetus that ‘Pure Cardhu’ would have had from its kick-start in Spain—thereafter expanding into other markets—remains to be seen. I think the wobbly successors of the Grand Old Duke have done a great disservice to their shareholders—and indeed to the industry generally. They’ve blown the chance to create a new business paradigm—as they used to say at my old school when they meant ‘model’. When some overpaid, creative type came up with the name ‘DIAGEO’, the in-house joke was that it was an acronym for ‘Don’t-Imagine-Any-Great-Employment-Opportunities’. On the basis that some poor sod will have to carry the can for the Wobblers, the humour of the acronym may well be lost. So there we have it… The Advocate’s slant on the great Cardhu cock-up. Coming from the mouth of the horse, so to speak. Others will have their views. Did the wobblers wobble because of blackmail threats totally unconnected to Cardhu? Was sex involved, or money laundering, or international double dealing? I’ve heard rumours—but I couldn’t possibly comment on these here. Unless you happen to have another slant on all of this…
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