Scotch loses its flavour

Douglas Fraser takes a close look at the economics of whisky
Douglas Fraser takes a close look at the economics of whisky

We have known for a while that Scotch whisky's stunning growth through the downturn years had slowed up. With Diageo's full-year results, we know better why that is.

Emerging markets have stalled, tastes are changing, the industry giant has stalled, and it's responding by turning its marketing attention to rival spirits.

The Diageo market proposition is quite simple, but its figures are not. The drinks giant produced a messy set of figures. They included elements of United Spirits, the giant of the Indian industry, taking control from Vijay Mallya during the last financial year.

The flamboyant Indian's accounts are now the subject of legal action, which in India can get messy and drawn out. Ask Cairn Energy, or Vodafone.

The scale of the Indian acquisition, in the world's biggest market for whisky, is clear from the 1700% rise in the company's sales there, the vast bulk of it "Indian-made foreign liquor", while like-for-like growth of imported booze was only 3%. That translated to £921m extra in net sales, a rise of nearly 9% in the global total.

Diageo has taken control of Vijay Mallya's United Spirits

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Who owns a company, part 2?

Bank of England chief economist Andy Haldane
Bank of England chief economist Andy Haldane's speech is an "insightful read"

We've seen many established pillars of society shaken and rattled in recent years. Now, it seems to be the turn of the public limited company.

My most recent posting was about the questioning of the dominance of shareholders, and the short-term demands for results, data, dividends and share buy-backs that they impose on company bosses.

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Shareholders or fair shares


This will be a busy week if you're in the shareholding business - not only if you're caught in the Shanghai rout, but also if you watch some of the big players in corporate Scotland.

Whisky giant Diageo is on the regulatory rocks with an inquiry into its market information, being carried out by the Securities and Exchange Commission, while key growth markets have stopped growing.

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Competing on the same tracks

virgin train

I'm on a train, in case you're wondering. It departed Glasgow Central platform 2 at 13.40, bound for London Euston.

At platform 1, another train was preparing to depart 20 minutes later. It's also run by Virgin trains, identical in every way - as you might expect.

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Growth in jobs, pay and output

Jobcentre queue

The rise and rise of UK employment has taken a jolt, with a fall of 67,000 in March to May and the first rise in unemployment for two years.

The increase of 15,000 seeking work was precisely matched, according to the Office for National Statistics survey, by the fall of 15,000 in the number of Scots seeking work at some point during the spring months. One thousand more Scots were in work.

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FanDuel plays in the big leagues

American football scene

If your fantasy is to create a billion dollar business, why not create it out of fantasy?

That's what Nigel and Lesley Eccles have done as co-founders at FanDuel.

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Over to you, Business

George Osborne with Budget briefcase
This was the first Conservative Budget since 1996

Nearly 20 years ago, Kenneth Clarke was delivering the last Conservative Budget in the House of Commons, at the same time his party was arguing that their Labour opponents would cost many jobs if they went ahead with their plans for a national minimum wage.

A few months later, Gordon Brown was Labour's Chancellor. That minimum wage was introduced, and set at a level where economists at the independent Low Pay Commission believed would give the maximum hourly rate to low earners which avoided damaging their employment prospects.

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Energy markets: switched off

Montage of big six energy suppliers

Energy companies are down there with banks at the bottom of the public's league table for love and affection. (Yes, and journalists too.)

So it fits the public and political narrative to pick up on the headline finding of the Competition and Markets Authority (CMA) review of the energy market - that we've been overcharged to the tune of £1.2bn a year.

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Who wins from workplace flexibility?

CalMac workers
CalMac workers are due to hold a second strike next week

If you're reading this while waiting for a train this or coming Sundays, you may want extra battery power, as the wait may be longer due to services being harshly cut. There aren't enough drivers available, says Abellio, the new operator of ScotRail.

But don't worry, because another dispute will be along in a moment. CalMac crew are heading for their second stoppage, next Friday, to get leverage over the current tendering process for the west coast ferry contract. They fear for their job security if private sector Serco wins the bid over publicly-owned Cal-Mac.

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Diageo checks out of Gleneagles

Gleaneagles is seen as being one of the traditional Crown Jewels of Scottish tourism

Gleneagles occupies a sizeable chunk of Perthshire, and uneven terrain between private opulence and national institution.

Others vie with it to be the best hotel in Scotland. None of them can touch it for being the best known.

Read full article Diageo checks out of Gleneagles