UK: Diageo closes Chase Distillery, moves production to Scotland

Diageo has closed its Chase Distillery in Herefordshire and moved production of the brand’s gins and vodkas to Scotland, The Grocer reported on January 8.

The move, which was communicated to staff working at Chase last June and is now complete, was designed to “future proof” the brand, Diageo said.

“Since acquiring Chase in 2021, we have seen substantial change in the vodka and gin categories,” a spokeswoman for Diageo said. “To future proof Chase, we took the decision to renovate the liquid, revitalise the packaging, and transform the brand supply to drive its efficiency. These developments are designed to create future growth opportunities for the brand.”

Chase production has been shifted to Diageo’s Cameronbridge Distillery in Fife, The Grocer understands. The single grain distillery also produces liquid for Diageo brands including Gordon’s, Tanqueray and Pimm’s.

A total of 17 staff working at Chase Farm were given the option to transfer to other parts of the Diageo business, or offered redundancy terms. Four of these staff have elected to stay with the supplier, while the remainder have now left the business.

It comes after Diageo shut an on-site visitor centre at Chase in 2022, having acquired the brand from Tyrell’s crisps tycoon William Chase for an undisclosed sum in 2021.

Diageo now intends to liquidate Chase Distillery, according to newly filed accounts for the subsidiary at Companies House.

“In the last quarter of the current financial year, the directors initiated a Chase brand redesign programme based on a decision by the Diageo Group,” Chase director James Edmunds wrote in accounts covering the year ended 30 June 2024. “This programme will result in the transfer of all production activities to Diageo Scotland Limited, the brand owner of Chase.

“Test productions have already commenced, and the anticipated changes have been communicated to employees,” Edmunds said, adding the liquidation process was expected to complete by 30 June 2025.

Turnover at Chase Distillery grew by £600k to £5.3m in the 12 months ended 30 June 2024, but is down on the £11.7m reported in 2020 – the last full year before Diageo acquired the brand.

The company also fell into the red, reporting a pre-tax loss of £3.2m – compared to a £245k profit the year prior.

One-off costs of £3.9m incurred “in relation to asset write downs, stock write offs, redundancy and contractual commitment provision charges” ahead of Chase’s planned liquidation were to blame for the dip in profitability, Edmunds said.

Sales volumes of Chase spirits in the UK more than doubled to just shy of 200,000 litres in the year ended 21 April 2024, according to NIQ data compiled for The Grocer’s Britain’s Biggest Alcohol Brands report.

Owner Diageo, however, has struggled to match post-pandemic sales highs, having reported a 0.6% decline in net organic sales in the year to 30 June 2024. Volumes also fell by 3.5%.

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