Outlook: Dewar's won't end up in Scotland

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Best-selling liquor brands like Dewar's so rarely come on the market that hardly anyone can remember the last time it happened. So the sale of this top-selling scotch, which is being forced on Guinness by competition authorities in Europe and the US as the price of the company's merger with Grand Metropolitan, should be quite a spectacle. With annual profits of around pounds 60m, analysts expect the brand to be knocked out for anything up to pounds 700m, depending on what in the way of distilleries and bottling halls the Federal Trade Commission in the US stipulate must be attached to the sale. Dewar's is a comparatively unknown brand in the UK, but in the US it is the number one best seller.

The prospect of such a treasure coming on the market is causing some understandable excitement north of the border, where suddenly there is the possibility of creating an independent scotch whisky company of some size once more, reversing 70 years of consolidation and takeover from the Sassenach and the foreigner. Och, the thought of it.

Unfortunately, this is a dream likely to be as transitory as the Scottish mist. This is quite a bite for any venture capitalist, but on top of the pounds 700m asking price, the purchaser would also have to demonstrate to the competition authorities funds adequate to support and develop the brand in the US and Europe. An alternative would also need to be found to the Guinness/LVMH distribution network around the world. That wouldn't be impossible but it would mean surrendering quite a bit of the brand's profit margin to someone else. All of which makes it much more likely that Dewar's will end up as a trade sale to one of the world's established drink producer/distributors. Shame.

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