Distillers Company

In its day, the Distillers Company Limited was one of the most powerful in the United Kingdom. It controlled the majority of the Scotch whisky market both domestically and abroad, and successfully diversified into industrial and medical chemicals, yeast, glass production and plastics. Its original premise was simpler though: to create a trade association to combat the unrestricted competition between distillers that was damaging profit margins. The founding members of DCL in 1877 were Port Dundas, Carsbridge, Glenochil, Cambus, Kirkliston and Cameronbridge distilleries. The latter was owned by the Haig family but despite their involvement, its blending arm, John Haig & Co, remained independent. John Crabbie & Co had dropped out of an earlier draft of the agreement, however Caledonian distillery owners, Menzies & Co, joined in 1884.

DCL was quick to expand upon its intended remit however. The Pattison’s Crash of 1898 saw it set its sights on industry-wide consolidation to prevent future economic failures and it began a ferocious acquisition policy that saw it take over blending firms and distillers alike. In 1914 it set up the Scottish Malt Distillers subsidiary to buy the Lowland malt distilleries of Clydesdale, Grange, St Magdalene, Rosebank and Glenkinchie, and by 1922 they control all but one column still in Scotland, all but two in England, and through their acquisition of United Distilleries of Ireland that year, all but one in Ireland.

The company evolved into a juggernaut that came to control 70% of their market and made it an early nemesis of the “big five” blending firms of the day, namely John Walker & Sons, John Dewar & Sons, James Buchanan & Co, Mackie & Co and John Haig & Co. These firms competed intensely with DCL in the early days, however the developments of the early 20th century rendered much of this in vain. Like dominoes, the group fell into the DCL fold. John Haig & Co were first in 1919, with John Walker & Sons and the newly amalgamated Buchanan-Dewar following in 1925. The last bastion of resistance was Sir Peter Mackie, who’s death in 1924 saw his company, now called White Horse Distillers join the others in 1927.

Thus, DCL became the epicentre of Scotland’s blended Scotch industry. Interestingly, DCL essentially allowed the blending companies under its control to operate with a sense of autonomy and each was allowed to pursue its own unique business interests. The distilleries it owned were licensed to the blenders according to their needs, often back to those that had originally owned them. It is for this reason that single malts were never their main order of business, the blender’s brands like Johnnie Walker, Dimple, White Label and White Horse came first.

However, some of these blenders did choose to market single malts. Ainslie & Heilbron bottled Clynelish for example, and James Buchanan marketed Dalwhinnie. Where their blenders were less interested, DCL also licensed brands externally to those who were. The most notable of these was Gordon & MacPhail of Elgin, who released officially labelled bottles of Mortlach, Linkwood, Talisker and latterly, Glen Mhor.

DCL’s first foray into the North American markets came when they struck a deal with Samuel Bronfman to distribute their products. In the 1920s, he offered DCL money and a share in his business in exchange for aged whisky to feed his illicit exchange with smugglers in the Prohibition-hit US, and Distillers Corporation-Seagram Limited was born. Bronfman was financially positioned to make his mark quickly in the US market following repeal in 1933, and was so successful that he was able to end his relationship with DCL after a disagreement over their prices.

DCL then struggled to capitalise on the American market, both in the face of vengeful competition from Bronfman himself, and their policy of allowing US distributors to market their brands, ceding most of their profits to them. This changed in the 1980s however, and they bought over Somerset Imports in 1984 to reobtain US distribution for the Johnnie Walker blends. The deal of course included another important Somerset property, the Stitzel-Weller distillery, bought by company from the Van Winkle family in 1972.

The 1980s was not all rosy, however. The previous decades had been largely successful in terms of Scotch whisky, but this lead to a period of over-production in the 1970s that became known as the “whisky loch.” Owning the most distilleries, DCL felt the pinch harder than most, and it shut down a swathe of Scottish distilleries in 1983. Alarmingly, this was the year that their profits peaked, and 1984 saw a drop in excess of £11m. DCL struggled to turn around its fortunes and by 1985 it was ripe for the picking, facing a hostile takeover bid from supermarket group, Argyll. Seeking a “white knight” as an alternative, the company reached out to Irish brewer, Guinness, who merged them with its Arthur Bell & Sons to become United Distillers in 1987.