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Ian MacLeod Distillers Ltd.

Whisky Concerns

Russel House
Dunnet Way

Still Scottish - Still independent

Managing Director: Leonard  J. Russell Snr owned his own whisky broking company in 1936.
He died in 1956
Ian Macleod & Co Ltd was acquired by the Russell family on 18 March 1963
Peter Russell was Managing Director
David Russel, Peter's younger brother, joined the company in 1964 and was
a Director, retiring in 2000
Acquired the company and label called William Maxwell
Leonard Russel, Peter's son joined the company in 1989 as Business Development Manager,
and appointed Marketing Director in January 1993
Ian Macleod / J. & G. Grant - joint venture set up the bottling operation, Broxburn
Bottlers, in July 1984
Peter Russel appointed Chairman and Leonard Russel appointed Managing Director in 2000.
Ian Macleod & Co Ltd changed its name to its current name Ian Macleod Distillers
Limited following the acquisition of Glengoyne Distillery and the Langs Brands
In April 2003
Tamdhu is bought on 28th June 2011

"As We Get It"                                                   
The Six Isles
Chieftain's Range                                             
Watson's Demerara - & Trawler Rums
Dun Bheagan Collection                                   
Wincarnins Wines
Hedges & Butler
Isle of Skye
King Robert II
London Hill Gin
Marlborrough Gin
Moffat Springs
Queen's Seal                                     
Rostov Vodka
The Six Isles
Watson's Demerara & Trawler Rums
Wincarnis Wines

Independent, family-owned distiller, blender and bottler.

Ian Macleod Distillers is based at Broxburn, West Lothian, and owns Glengoyne distillery in Stirlingshire and Tamdhu distillery at Knockando on Speyside. Its principal blended brands are Isle of Skye, Smokehead and King Robert, though a range of independent bottlings are also undertaken under the As We Get it’ Chieftain’s and Dun Bheagan banners. As the world’s 10th largest Scotch whisky company, Macleod’s produce and sell over 15 million bottles of spirits every year.

The firm is a major supplier to the ‘buyers’ own brand’ market and has provided own-label spirits to some of Europe's largest supermarket groups for over 40 years. Macleod’s owns 50% of Broxburn Bottlers, with the other 50% being held by J&G Grant of Glenfarclas. The chairman of Ian Macleod is founder Peter Russell, whose son Leonard serves as managing director.

Peter Russell’s father Leonard started out in business as a whisky broker in 1936, expanding into blending and exporting. Peter joined the firm in 1956, and the name Ian Macleod & Co and its Isle of Skye blended Scotch whisky brand was acquired by what had become Peter J Russell & Co in 1963. Ian Macleod & Co had been incorporated in 1933. The unspecified Islay single malt Smokehead, with a singularly contemporary image, was introduced in 2006.

The company achieved a long-held ambition of becoming a distiller when it purchased Glengoyne from The Edrington Group for £7.2 million in 2003. A second distillery, Tamdhu, was acquired from Edrington eight years later, and reopened in 2012 having been mothballed since 2009.

In September 2016 the company bought whisky blender and gin distiller Spencerfield Spirit Company for an undisclosed sum, adding the Pig's Nose, Feathery and Sheep Dip blended Scotch whiskies, and Edinburgh Gin brand to its portfolio.


Duncan MacGregor
Glen Tress
Hedges & Butler
Isle of Skye
King Robert II
Pig's Nose
Sheep Dip
The Feathery
The Queen's Seal
The Six Isles

Hedges and Butler Limited
Lang Brothers
Spencerfield Spirit Company

October 2017
Rosebank, the coveted Lowland single malt Scotch whisky distillery which closed in 1993, is to be brought back to life by Ian Macleod Distillers.

Rosebank is the third distillery this week set for revival
The company, owner of  Glengoyne and Tamdhu single malts, has reached an agreement to buy Rosebank’s Falkirk site from current owner Scottish Canals, and has separately acquired the Rosebank trademark and stocks from the distillery’s previous owner, Diageo.

Up to £12m will be invested over the next few years to bring Rosebank back to production, with spirit running off the stills by 2019 at the earliest.

All equipment will have to be installed in the old distillery building, including three stills for triple distillation, plus worm tub condensers, in an effort to replicate Rosebank’s historic style of sweet, floral Lowland single malt.

Production capacity will be similar to that planned for the soon-to-be-revived Port Ellen and Brora distilleries – somewhere between 500,000 and 1m litres of alcohol a year.

Rosebank ceased production in 1993 when owner UDV (now Diageo) mothballed the site because of the cost of upgrading its effluent treatment plant, as well as problems over road access.

The site was sold to British Waterways in 2002, and the stills and mash tun were stolen during the Christmas and New Year holiday of 2008/9.

‘Rosebank is one of the most respected and sought-after single malts in the world,’ said Ian Macleod Distillers managing director Leonard Russell.

‘As such, this is an extraordinarily exciting project for us. To bring back to life an iconic distillery and quintessential Lowland single malt is truly a once-in-a-lifetime opportunity.’

He added: ‘We will produce Rosebank Lowland single malt in exactly the same way as it is known, using the famous triple distillation and worm tub condensers. This way we ensure the revival of its classic style and taste.’

Plans also include a visitor centre on the site ‘to help tell the story of this remarkable whisky’, said Russell.

In the meantime, the company plans to release Rosebank single malt bottlings using the stocks acquired from Diageo, which date from the late 1980s and early 1990s.

‘Over the coming months we will carefully review Rosebank’s rare stocks with a view to releasing some truly scarce and extraordinary whiskies,’ said Russell.

The news of Rosebank’s revival comes just a day after Diageo announced plans to restart production at two of its cult distilleries: Port Ellen and Brora.

October 2017
First Port Ellen and Brora, now Rosebank… the vogue for reviving ‘lost’ distilleries continues. The Falkirk plant – currently just an empty shell – may be producing spirit within a couple of years under new owner Ian Macleod Distillers.

Ian Macleod MD Leonard Russell aims to recreate the classic Rosebank style
There are ghosts walking among us… We’re not even halfway through the week, and already three ‘lost’ single malt Scotch whisky distilleries are set for revival. On Monday it was Port Ellen and Brora, on Tuesday it was Rosebank.

If Diageo’s plans for Port Ellen and Brora were a bolt from the blue, the resurrection of Rosebank has been rumoured for some time. Here, it was the identity of the new operator – Glengoyne and Tamdhu owner Ian Macleod Distillers – that was the surprise.

Rosebank’s quintessentially Lowland style of single malt, triple-distilled and famed for its floral, high-toned elegance, has made it almost as much of a cult favourite among collectors and connoisseurs as that redoubtable Diageo double act.

The plant closed in 1993, a decade later than Port Ellen and Brora, and, unlike those two, it wasn’t shut down because its spirit was unwanted; then owner UDV (now Diageo) was reluctant to pay for remedial works to the site’s effluent treatment plant, and there were reported problems with road access.

By 2002, Diageo had sold the site to British Waterways (it sits astride the Forth & Clyde Canal); the old maltings were redeveloped and, although there were plans to revive production, Rosebank’s stills and mash tun were stolen during the Christmas and New Year break of 2008/9.

More recently, rumours have swirled about Rosebank’s return, but the huge sticking-point for those who looked at the site was the fact that Diageo still owned the Rosebank trademark. Now that has changed.

‘We’re possibly one of the few companies who could reach an agreement with Diageo for the IP [trademark] and the stock,’ says Gordon Doctor, operations director at Ian Macleod, which has a long-standing relationship with Diageo in terms of providing fillings for blends. ‘I don’t think other people could have done this.’

If anything, the legend of Rosebank has grown since it closed in 1993

Why didn’t Diageo do it, in that case? ‘Had they still owned the site, I can imagine that they would. They might have been announcing a “holy trinity” yesterday of Brora, Port Ellen and Rosebank,’ says Doctor.

‘In our minds, we had a Speyside single malt [Tamdhu] and a Highland [Glengoyne], so we thought about building a Lowland distillery, and that got us round to saying: “What has there been in the past?” We knew [the site] was up for sale and that someone else had looked at it.’

In terms of that site, Ian Macleod is essentially buying an empty shell following the theft of the equipment. Plans – which could cost £10-12m, Doctor estimates – include the installation of a set of three stills for Rosebank’s triple distillation regime, plus worm tub condensers.

‘We don’t have a schedule as such,’ he says. ‘It’s all subject to planning permission and the regulatory authorities and so on. We’ve already been having discussions with Falkirk District Council, so we’re hopeful that there won’t be too many barriers… I think it would be beginning of 2019 at the earliest [that we start production].’

And is he confident that the company can overcome the issues that led UDV to mothball the site in the first place? ‘We’re fairly sure we can handle it, although the location in the middle of Falkirk makes it more difficult. If you were building or reopening a distillery, you probably wouldn’t choose to do it on that site.’

Rosebank’s planned production capacity will be similar to that of the ‘new’ Port Ellen and Brora: between 500,000 and 1m litres of alcohol a year, almost certainly entirely ring-fenced for single malt.

However, Doctor says: ‘We’re unlikely to be running at full capacity for the first few years. Full production means you’re producing a lot of cases, so you’d have to be pretty confident that you could sell a fair amount.’

Ian Macleod, like Diageo with Port Ellen and Brora, has already pledged to recreate as far as possible the historic style of Rosebank whisky – not easy when none of the kit is left in the distillery.

Existing supplies of Rosebank will fill the gap before production begins again

‘We will go back to the drawings that we will get from Diageo with Abercrombies [the coppersmith] and make sure it’s all built exactly the way it was,’ says Doctor. He believes the records are detailed, but admits that there will be some ‘trial and error’ in the early days of the new plant.

‘We might be able to find some old new make spirit lying in the Diageo Archive,’ he adds. ‘We’re hopeful that we’ll have access to that. We’ve also got samples through the years of Rosebank at different ages.’

For the moment, the focus in on this: triple-distilled single malt in the classic Rosebank Lowland mould. ‘Initially, I think it’s going to be doing everything we can to replicate what we did before,’ says Doctor. ‘But that’s not to say in years to come that whoever’s running the distillery won’t want to try something different. There’s no harm in experimenting.’

It will be some time before we see whisky from the ‘new’ Rosebank, however. ‘I don’t think we’ll be bottling any new make, unlike some others,’ says Doctor wryly. ‘Nor will we be bottling it on its third birthday.

‘It will come down to the spirit quality. If we believe there’s something after five or six years that people might like to taste, then fine. But we’re not driven by profit on this. We’ll bring it out when the time is right.’

As with Port Ellen and Brora, much intrigue will surround the cask policy at the revived Rosebank – an area that has developed hugely in single malt terms since the 1980s and 1990s.

‘If you look back at any old, old stock in a distillery, it’s almost a lucky bag if you find any decent casks,’ says Doctor. ‘We found out that going back to Tamdhu casks from the ’60s. You can find some great casks, and some pretty average casks.’

Now it’s all about the appliance of science, toasting levels, bespoke casks coopered and seasoned in Spain. ‘We put a lot more effort into that side of things now,’ Doctor says. ‘It will be experimental. I’d imagine we’d put Rosebank into a variety of casks to see how it will mature.’

For the moment, the company has Diageo’s existing stocks from the distillery to market and sell – all of it distilled in the late 1980s and early 1990s, none of it less than 25 years old. Casks need to be investigated; bottles and labels designed. It’s unlikely that we’ll see a release of old Rosebank stock until some time in 2018.

In the meantime, and as detailed plans are drawn up for the distillery’s new beginning, Doctor has just one more task on his already lengthy to-do list: finding and acquiring more casks of Rosebank.

‘There’ll be other stocks out there with independent bottlers and so on,’ he says, ‘and it’ll be my job to try to repatriate them.

‘Whether I’ll be successful or not we will see… The price has probably gone up a bit since yesterday.’

September 2016
Ian Macleod Distillers has bought Spencerfield Spirit Company, owner of Sheep Dip, Pig’s Nose and The Feathery Scotch whiskies, for an undisclosed sum.

The acquisition, which also includes Spencerfield’s flagship Edinburgh Gin brand, follows Ian Macleod’s long-standing partnership as the group’s exclusive distributor in the UK.

The Scotch whisky producer, which owns the Glengoyne and Tamdhu distilleries, will continue production of Edinburgh Gin at Rutland Place, as well as the second distillery at The Biscuit Factory in Edinburgh.

Alex and Jane Nicol, founders of Spencerfield Spirit, will continue to work with Ian Macleod for a short period to ‘ensure a smooth transition’.

Alex Nicol said: ‘The acquisition came along at the right time for Spencerfield Spirit. We have built a solid partnership with Ian Macleod Distillers over the last three years and feel they are in an excellent position to take forward Edinburgh Gin and the Spencerfield Spirit portfolio.’

Ian Macleod, which has safeguarded all jobs at Spencerfield Spirit, now intends to invest further in the company’s portfolio.

Neil Boyd, commercial director of malt whisky at Ian Macleod Distillers, which also owns the Smokehead and Isle of Skye whiskies, plus Atlantico rum, said the purchase was predominantly fuelled by a desire to acquire a gin.

‘We think Edinburgh Gin in particular is very high quality premium spirit brand and we had a gap in our portfolio for such a product,’ he said.

‘The motivation behind our purchase of Spencerfield really was to build further on Edinburgh Gin’s success and take it to another level both in the UK and internationally.

‘The whisky brands are a little bit more quirky and interesting. The opportunities are not quite as clear for the whiskies as they are for the gin, but there’s very positive traction internationally particularly in America with Sheep Dip and Pig’s Nose, and Feathery in France.’

Alex Nicol, former COO of Whyte & Mackay, founded Spencerfield Spirit in 2005 with the Sheep Dip and Pig’s Nose blended whisky brands, both of which he acquired from his former company.

Edinburgh Gin was launched in 2010, while The Feathery was added to the portfolio in 2014.

January 2019
The green light has been given for work to start restoring the disused Rosebank distillery in Falkirk, 25 years after it first closed.

Work will begin ‘shortly’ to bring Rosebank distillery back to life
Distillery owner Ian Macleod Distillers has been granted planning permission by Falkirk Council to transform the disused site into a working distillery, visitor centre and shop with space for warehousing.

Rosebank, which was first built on the banks of the Forth & Clyde Canal in 1840 as a maltings for Camelon distillery on the opposite bank, was eventually closed in 1993 by then-owner UDV (now Diageo).

Its maltings were converted into a restaurant but the distillery has lain silent since.

Ian Macleod Distillers, which purchased the site in 2017, expects to begin renovation work ‘shortly’, with a view to reopening Rosebank in autumn 2020.

Leonard Russell, managing director of Ian Macleod Distillers, said: ‘To bring back to life an iconic distillery and quintessential Lowland single malt is truly a once in a lifetime opportunity.

‘Rosebank distillery has a very special place in Scotland’s whisky heritage and we’re committed to ensuring this remains the case.

‘We will strive to replicate the unique Rosebank style by once more employing the unique techniques of triple distillation and worm tub condensers, for which this iconic Lowland single malt is famed.’

Rosebank will be an energy-efficient distillery capable of producing up to one million litres of alcohol per year.

With a range of distillery tours available, Rosebank’s visitor centre is expected to attract 50,000 visitors each year, ‘adding to the town’s flourishing economy and tourism scene’.

Councillor David Alexander, Falkirk Council’s spokesperson for economic development, said: ‘It’s great to see the Rosebank distillery coming back into use and this large investment on the site is to be welcomed.

‘We’ve worked closely with Scottish Canals and Ian Macleod Distillers to ensure that this site can become a great tourist attraction as well as bringing investment to the local economy and new employment opportunities.’

In its purchase of the distillery, Ian Macleod also acquired the remaining maturing stocks of Rosebank whisky from former owner Diageo.

The company will begin releasing limited bottlings from its acquired stocks – all of which was distilled in the distillery’s last few years – later in 2019
Having joined the industry in the turbluent ‘80s, Ian Macleod Distillers’ MD made a series of canny decisions that led to the purchase of Glengoyne, Tamdhu and, most recently, Rosebank distilleries. Here he tells Dave Broom about taking calculated risks and creating the ‘new old Macallan’.

Ian Macleod Distillers (IMD) – stealth distiller. In recent years it’s acquired Glengoyne, then Tamdhu and, most surprisingly, Rosebank. Stir in the acquisition of cash flow-boosting Edinburgh Gin, and the transformation of the firm is complete.

The man to tell me how a provider of retailer-exclusive bottlings metamorphosed into a distiller is managing director Leonard Russell, though getting to the heart of the story involves just sitting back and being carried on a journey with many digressions, double backs and dead ends. Avenues of conversation head off in one direction, then dive off into the opposite. It is enormously entertaining and, after a while, reveals someone who is alive to the bigger picture.

‘My grandfather was a whisky broker who worked with all the major blenders,’ he tells me as we sit in the firm’s Broxburn headquarters. ‘He maintained that, if he had a briefcase full of cash, there was always marginal production [to purchase]. Since the price for single malts was broadly speaking the same, he would fill the best blending malts which, in retrospect, is a brilliant plan. Why would you fill something which was a second or third-class bulk packer? These relationships, I’m happy to say, have continued.’

In the late 1960s, IMD shifted from broking to brand owning [Isle of Skye for example] under Leonard’s father Peter, who also began to blend and bottle for what was then new supermarket-exclusive labels – Sainsbury’s specifically.

By the late ‘80s, change was on the way. European discounters [Netto, Lidl and Aldi] had moved in, blended sales were falling, and the category was rapidly becoming commoditised. ‘When I joined [in 1989], the price of a three-year-old bulk blend was £3.26. Then it dropped to £1.50. It was disturbing. Quite difficult times. Because they were overstocked, bigger distillers joined in and viewed private label as a way of turning stock around.

The whisky industry is a long-term business, says Russell
‘It is scary being chucked around on the ocean of stock and volatile pricing. We had to be price followers, which is an unpleasant way to run your business because you’re not in control of your profitability – and other companies are bidding for your core business. The industry is now rather conveniently forgetting the times of bust.’

It was clear to him that the reliance on private label had to change. Enter single malt, and specifically in 2003, Glengoyne. As ever, there’s a story to accompany the hard facts.
Edrington are sticklers for being proper, and they wouldn’t let us on the site until the money had gone through, so we sat in the van outside and drank a bottle of whisky. Then, when it [the money] went through, I entered. The team genuinely didn’t know who had bought them. I said I didn’t know how to make whisky, and that we’d lost the Glengoyne manual, so we’d like them to stay on and keep on doing what they’d always done.

‘They loved that, because they went from being not a top priority to our core focus with a bit of love and joy… and they’re all still there.
‘Then, you see, we had a stroke of luck as the property market collapsed.’ The comment, as is often the case, seems to come out of left field. ‘It was very difficult for us to borrow money at that time. The banks were more interested in property developers. It was easy for them to borrow money and build up a land bank, whereas in whisky, things hadn’t been going well.
‘With the crash, the banks wanted to reduce their reliance on property and came up with asset-based finance, which is a very good plan…’ – there is a pause for dramatic effect – ‘...if you have a lot of assets. It meant you could borrow against your maturing whisky. That was fortuitous as it meant we had access to capital, and we could distil more and invest in more stock.’

IMD bought Glengoyne distillery from Edrington in 2003
So it was then inevitable that IMD would buy Tamdhu? ‘No,’ he laughs. ‘No. I was against the idea because we went into a period of having considerable debts, but there was a shortage of old stock and Tamdhu had a really interesting stock profile, including some old malt.’

But you ended up with the distillery anyway. ‘The spirit quality was good. It was just unloved. We could make it loved again.’

As he explains though, there’s a difference between buying stocks, and creating a style. ‘I didn’t want to launch something that didn’t have an identity. Thankfully there was a rich seam of Sherry.
‘With Tamdhu, the idea has been to build stock and be the “new old Macallan”, which I’d rather other people say than me. There’s room for another Sherried malt, which could slip nicely into that niche.’
How much of a learning curve was this switch from broker to distiller?

‘Steep. For me at least, but my father always told me if you are going to recruit people, make sure they are better than you. Now that’s counter-intuitive, because if you’re a senior manager and you recruit someone who is better than you they might well take your job. But they can’t take mine because I own the company... he said smugly.’

‘I’ve always tried to recruit people who are better than me and people I would enjoy going to dinner with. Those are my rules. Being a small independent is beneficial because…’ Hang on Russell, you’re the same size as Whyte & Mackay. There’s an expletive and a shake of the head. ‘I know. How did that happen? We’re in a better position because we’re not under any huge financial pressure to consistently over-perform every year, so we’re not having to push sales. If we don’t sell any 12-year-old whiskies this year, we can sell some 15-year-old in three years’ time. Actually, the lazier you are the more valuable you become.’
Is there also an issue that there’s not enough people who understand that whisky’s a long-term business? ‘Possibly. If you’re managing the stocks within a large company and you see you have some 30-year-old, wouldn’t you sell it because it would give a huge spike in your profits?

‘A lot of firms are driven by short-term profit targets.’ He guffaws. ‘Avarice and greed. But really, if you are a whisky division [of a large distiller] you have to have targets. Our only target was to be able to manage the debt, so as long as we were able to finance that I was happy, and not under pressure to take short-term sales sacrifices at the expense of long-term gain.’
Subsequently, there’s been the purchase of Edinburgh Gin just at the point when that category exploded, and there’s now plans to open a distillery in the centre of the city. Glengoyne has become Scotland’s most-visited distillery and one of its greenest. Then there’s Rosebank.

After the chat, we head along the road to Falkirk to have a look at the site. The warehouses are pretty sound, but the distillery is cold and ravaged. Pigeon shit everywhere, holes where copper thieves ripped out the stills, the enormous mash tun rusted, its gears seized up. The old distillery buildings have to be rebuilt. A palimpsest. The same, yet different.

‘It was too good to be true that the lease was up for grabs,’ he says looking around the courtyard. ‘We didn’t do any business planning. You didn’t need to, because it was too obvious. We were really lucky. It obviously wasn’t in Diageo’s plans – I imagine they’d been thinking about Port Ellen and Brora – and they didn’t own the site.’

The key was getting the stock? ‘Absolutely. I thought that even if we had the stock in isolation, we will not be embarrassed because it will be valuable. If cash flow prohibited a rebuild, we could always sit on it and look after the whisky with care and love.’ But all fell into place perfectly. Diageo sold the stock, and Scottish Canals sold them the site.
‘It’s made me so proud, because Rosebank is a proper, proper whisky. This is a dream.’

So what are the plans? ‘We won’t launch until we get it right. We are determined to replicate what it was. Fabulously, the stillmaker [Abercrombie] still had the plans and Diageo’s archive team gave us all the background information, so we will get the same people to make the same stills from the original plans. It’s fucking cool. We can make whisky as it was made in the past, but in a different layout because we are creating a visitor experience around it.’

We wander into the warehouse. ‘It’s a long-term legacy I want to build,’ he says. ‘Three distilleries – four with the gin – are exciting and it is going to take a long time, but we have sufficient sales to be able to take a long-term view. The old stock we have will help with the rebuilding of the new distillery, but I’m nervous of what people will say about it.

Inherited whisky: Russell believes Rosebank’s old stocks will help rebuild the distillery

‘Managing the change [from bottler to distiller] has been a challenge, but to be able to manage the growth we’ve achieved is remarkable, and a lot of that comes down to being lucky.’
You keep mentioning luck.

‘The chances that we exist, that the sperm hits the egg, are slim at best. The fact that we were born into a developed economy and had money to go to university and choose a career is outrageously lucky.
‘I know I’m fortunate to be able to ponce around in this industry, which is the best in the world because we are friendly to each other. I’m the luckiest person I know.’
But do you make your own luck?

‘I suppose you do. It’s often the deals that you don’t do which make you successful. I do take calculated risks, and have a team around me whom I trust and who are extremely good at what they do. I couldn’t do anything without them.’

But you’ve made some pretty canny decisions.
A longer pause. A smile. ‘Yeah. I have actually,’ he laughs.
‘I can’t be that modest all the time, but luck has played a major part. The macro environment has moved in our favour, consumer demand has moved into single malt. Let’s find out in 10 years’ time if I’m right, but we have the right people and the right model, so I’m quite relaxed.’

The Islay Boys secure planning permission for new Laggan Bay whisky distillery

The Islay Boys have announced planning permission for a distillery and brewery building at Glenegedale in Laggan Bay on Islayished: August 1, 2022
The application, approved by Argyll and Bute Council, allows the firm to advance with plans to build a distillery building to house a traditional, double-distillation Islay whisky.

Named Laggan Bay Distillery, it will become the 12th whisky distillery on Islay.

In addition, the firm will bolster their brewing credentials with a new building to house a brewkit for their Islay Ales.

The distillery and brewery site covers some two hectares, just opposite Islay’s airport in the centre of Islay, and is situated less than a mile from Islay’s longest beach, the Big Strand in Laggan Bay, from which the distillery takes its name.

As part of the project, The Islay Boys have announced a partnership with family-owned Ian Macleod Distillers Ltd to help bring the new distillery to fruition.

The Islay Boys have a long standing with Leonard Russell, chairman of Ian Macleod Distillers Ltd, who said: "I have known and worked with the Islay Boys for a long time, and I’m delighted to be able to bring our long experience in creating quality Scotch Single Malts to the Laggan Bay Distillery project."

Scotch in the Family: the Non-Corporate World of Ian Macleod
Life for independent, family-owned Ian Macleod Distillers hasn't always been easy amongst the big corporate beasts that dominate the industry. But right now, it seems to be almost thriving with its trio of malt distilleries, reports Ian Fraser for WhiskyInvestDirect …

AS he navigates between the 'Scylla' of Brexit and the 'Charybdis' of staff shortages, supply chain breakdowns and other complexities caused by the Covid-19 pandemic, it's clear that Leonard Russell is having fun.

Ian Macleod Distillers (IMD), the business he has led for 33 years, posted pre-tax profits of £18.7 million on sales of £101.7m in the year to September 2020 - down from £22.9m on sales of £110 million in 2019.

Gross profit margins are high – at around 56.3% – because IMD places whisky stocks on its books "at historic cost or net realisable value which is lower," Leonard explains. "I like to be prudent."

While he won't divulge details of subsequent financial performance, he says: "Demand for our brands has continued to grow despite the pandemic, particularly for Glengoyne, and Tamdhu. For single malts there's significantly more demand than our ability to supply, particularly for our whisky aged 18-years-old and above. These are remarkable times."

"In the past 30 years or more there have been periods when we've been unable to sell our older whisky, and that was very stressful," he continues. "But for the last five years there's been constant growth in demand - and I suspect greater China, Asia and America will continue to grow."

Speaking via Zoom from his home-office in Fife, Leonard took over as MD of the family-owned company from his father Peter Russell, aged 28, following stints at Scottish & Newcastle and IDV, and armed with an MBA from Edinburgh University.

At the time, the Broxburn-based company was focused on producing own-label whiskies for Sainsbury's and other supermarkets. However, in the late 1980s and early 1990s that market became more competitive and less profitable - and he realised IMD's future lay in owning distilleries and brands of its own.

The company went on to acquire Glengoyne and Tamdhu from the Edrington Group in 2003 and 2011 respectively, launched "edgy" Islay single malt Smokehead in 2006, and swallowed up Edinburgh Gin in 2016. Two years later Leonard struck a deal with Diageo and Scottish Canals to secure the Lowland distillery of Rosebank and its remaining stock, which Diageo had shut in 1993.

Ian Macleod's Smokehead single malt is a bold entry into the Islay category

Leonard still considers IMD to be a "small" company and insists that being family-owned brings real advantages. "Listed companies come under a lot of pressure to deliver short-term performance whereas we're able to take a longer-term view. There won't be a return on Rosebank until we start bottling at least 10 years from now.

'Being small' means we don't have the amazing distribution muscle that the bigger companies have but equally we do not have the short-term pressures they face - so it's swings and roundabouts.  I'm very happy because there's no one telling me what to do."

The company gave its longstanding bankers RBS the boot in 2017, after the bank sought to harden the terms on its loans. IMD switched to Pittsburgh-based PNC which, alongside Bank of Scotland, has provided a £100m asset-based lending facility, which has enhanced IMD's freedom of manoeuvre. "PNC understood broadly what we wanted to do and have been hands off," says Leonard.

Aside from supply chain issues and hugely lengthening delivery times for cartons, the pandemic caused an intense crisis for IMD. In March 2020 as the first lockdown was imposed, the company had to suspend all capital expenditure, putting two large construction projects - its new Broxburn head office and the Rosebank distillery and visitor centre - on hold.

It also had to shut its visitor centres at Glengoyne and Edinburgh Gin, with all guides furloughed, and to introduce social distancing elsewhere, which slowed production. "It was a stressful time. I didn't know whether we would be able to continue trading," says Leonard.

Nearly two years since that hair-raising experience, things have stabilised, allowing him to wax lyrical about the restarted Rosebank construction project, and how bringing an iconic distillery back to life on the banks of the Forth & Clyde Canal in Falkirk will be good for community and company alike.

(l to r) Leonard, Peter, and Tom Russell show off their plans for the rebuilt Rosebank distillery

Thanks to the rediscovery of original plans, IMD, with help from Michael Laird Architects, has been able to replicate many aspects of the original distillery, which is due to reopen in late summer. IMD has already redesigned the packaging and is slowly selling off the precious, inherited stocks of Rosebank whisky.

As far as international distribution is concerned - and 75% of its whisky is exported – IMD deploys a "mix and match" approach, says Leonard.

"We appoint people who we enjoy working with and who share our ambitions." They range from enthusiastic one-man-bands to regional wine and spirit firms. However, he concedes the US is "a difficult market because of its three-tier system, which means you have to start by working with the really tiny wholesalers - which also presents a challenge."

Social media marketing is "ever increasing" in importance he says, with less now spent on traditional media. "We have lots of people and agencies doing that because it's all about getting content that is interesting. And our own, direct-to-consumer online business has grown, partly as it's been given a significant leg up by Covid. It's remarkable how the whole landscape has changed."

He claims IMD is making progress in sustainable production through the use of renewable energy and incremental improvements in efficiency, and points out that Glengoyne was named 'sustainable distillery of the year' by Whisky Magazine this month.

"Even so," he adds, "we're bad people by virtue of the fact we're fermenting starches - which creates a lot of carbon dioxide. We're going to need some technological advances to achieve [net zero by 2040]. Hydrogen is going to be the largest technological leap forward."

Discussing the future of the industry, Leonard is not in favour of the SWA loosening the criteria for what constitutes a Scotch whisky. "That to me is not a barrier to entry, it's a quality endorsement, and is something that we should not undo." By contrast, he feels the definitions of Indian, Canadian and Japanese whisky are far too loose.

He also suggests he would not be surprised if, at some stage, Edrington, which owns Macallan and the Famous Grouse, is carved up by other players, such as Suntory and William Grant & Sons who both have existing stakes in the company.

And finally, like many in the industry, he takes a dim view of Scottish independence, saying: there are "many unanswered questions. I don't follow how Scotland's business model as an independent country would work. The status quo seems a better option than diving into the unknown."  
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