LVMH MAKES SCOTCH PRICES SKYROCKET

LVMH UPS GLENMORANGIE SINGLE MALT SCOTCH WHISKY PRICES

                                                          FIRST POSTED IN 2009 FOR COMPARISON

THE LASANTA

The last phase in the production of Scotch whisky is the maturation of the new make in wooden barrels. The result is called wood-finished whisky, because it picks up distinctive flavours from the barrel wood. Wood-finishing has been the hottest trend in Scotch for the last few years. Often the results are sweeter and fruitier than traditional Scotch and more appealing to people who are new to its craggy style, but connoisseurs also are attracted by wood finishes because they can show a surprising new side to a well-known brand. Glenmorangie has been the best selling single malt in Scotland almost continuously since 1983, and produces around 10 million bottles per annum, of which 6 to 6.5 million are sold in the UK.

Glenmorangie Distillery is located in the Northern Highlands Scotch distillery section of Scotland, UK, 65 km north of Inverness, overlooking the lonesome waters of Dornoch Firth. It claims credit for the popularisation of the idea of 'finished malt whisky' - although it is not certain if they were also the first to apply the technique of double maturation in another cask. Macallan and Balvenie are also well established promoters of 'finishing malt whisky' in a cask that housed another spirit.

According to the Glenmorangie Company, the earliest record of the production of alcohol at Morangie Farm owned by the eminent Matheson family is dated 1703. In the 1730s a brewery was built on the site that shared the farm's water source, the Morangie Burn.

Once distillation was legalised in 1823 on the purchase of a licence at an annual fee, the Matheson family acquired land in 1843 just across the brewery to convert the Morangie brewery to a distillery. The eldest son, William who had spent the preceding decade and a half studying and learning distillation at Elgin, took over as Distillery Manager and equipped it with two pot stills in sequence. He renamed the distillery Glenmorangie, with its water source now the mineral-rich Tarlogie Spring. The first drop of new make was sold only in 1849, as a three-year old whisky.

The distillery was purchased by the Maitland brothers and Duncan Cameron in 1887, who induced a Gin manufacturer, the Taylor family from the neighbouring village to join them. Taylor brought his Gin still necks to add to the existing squat stills with short necks, such addition resulting in the famous giraffe-style tallest-necked stills in Scotland, changing the output spirit almost totally into a light and smooth entity. Ownership then passed to its main customer, the Leith firm Macdonald and Muir, in 1918. The Muir family would retain control of the company for almost 90 years, up to 2004. In the interim, the flourishing company bought Glen Moray in Elgin Speyside in 1923, essentially for its spare stock of malted barley, and the now-off now-on Ardbeg distillery in Islay in 1997. With Ardbeg's stock of old whiskies maturing silently in the darkness, they had hit pay dirt! Sure enough, Ardbeg prices started to spiral. The next buyer was the giant international fashion-forward company, Moet Hennessy Luis Vuitton (LVMH), who acquired Glenmorangie on 20 Dec 2004 for £300 million. Ardbeg was part of the package, but Glen Moray was hived off to French La Martiniquaise.

Glenmorangie, like all distilleries and breweries in Britain, suffered terribly between 1920 and 1950, with Prohibition and then the Great Depression in the United States reducing whisky sales. The distillery was effectively mothballed between 1931 and 1936. The depression ended with World War II, but the war effort left fuel and barley in short supply and the distillery was again mothballed between 1941 and 1944. Exports of whisky were important during the war, but enemy action disrupted and destroyed deliveries to the United States and Canada. Towards the end of the war and in the immediate post-war period, the distillery recovered to increase production and was running at full capacity by 1948.

The number of stills was expanded from two to four in 1980, which was also the time they stopped malting their own barley. In 1990 the stills were expanded again to a total of eight. Those eight stills enable Glenmorangie to produce four million litres of pure alcohol each year, confirming them as a worldwide brand. In 2009, Glenmorangie distillery added two pairs of brand new stills to the eight already in use, increasing production capacity from 4,000,000 litres of alcohol per year to 6,000,000 litres of alcohol per year. Together with Bunnahabhain and Isle of Jura, Glenmorangie has the tallest pot stills in the industry at 26 ft 3 in (8.00 m) tall, with 16 feet 10.25 inches (5.1372 m) necks.

First released more than 175 years ago, the original Glenmorangie 10 year old was known for its mellow tones and delicacy of flavour. All these years later, The Original remains at the heart of Glenmorangie. To give Original a delicious, go-anywhere finesse, they make it in their high stills, then age it for 10 years in bourbon casks to absorb all manner of delectable flavours. The result is a smooth welcoming whisky with a rush of citrus, then layers of luscious flavour, from orange to honey and creamy vanilla, with bursts of peach. This whisky is their bestseller in Scotland.

Around 1995 Glenmorangie released four different ' wood finishes' - a Port Finish, a short-lived Madeira Finish (stopped in 2007), a Sherry Finish and a Sauternes (Burgundy) wine finish. Later on some more finished 'limited releases' were bottled. The bottles actually hold single-malt Scotch, but the Glenmorangie in each has been "finished" for two years in barrels that once held wine, after ageing 10 years in the traditional second-hand Bourbon barrels.

The Tall Copper Stills at Glenmorangie

Some of the most knowledgeable in wood finishing are distilleries such as Edradour, the smallest distillery in Scotland, and Isle of Arran. A lot of big names are doing wood finishes as well, including Glenfarclas, Bowmore, Macallan and Springbank. Springbank's 11 year “Madeira Wood”, for example, was matured entirely in ex-Madeira casks. So far, at least 33 of the 95-odd active malt distilleries in Scotland have issued one or more wood-finished whiskies.

In the 1970s, Scotch distillers concluded that finishing in sherry barrels overpowered some of the natural flavours of Scotch, so they switched almost entirely to American Bourbon barrels. That said, some distillers still felt that some desirable flavours could be had from used ex-wine seasoned wood, so a series of experiments were tried at a low scale over five years, studying the effects of different woods. Eventually, they decided that full maturation in ex-Bourbons barrels, followed by finishing the maturation in other wood for shorter periods gave the best results. The first release was a 12-year-old Glenmorangie finished in Port barrels, the Quinta Ruban. This is now a 14 Year Old.

It was undeniably tasty, but Scotch lovers cherish tradition, so there was a fierce controversy. Well known spirits writers first decried and denigrated wine-finished Scotch as either a way of covering up flaws in whisky or a cheap gimmick aimed at unsophisticated people who like sweet, fruity drinks. But in the 2004 edition of his book, spirits writer Michael Jackson acknowledged that wood finishes had become an established part of the single-malt market. Soon thereafter, the company was sold to the French drinks company Moët Hennessy Louis Vuitton for around £300 million. The prices of the Glenmorangie and Ardbeg range of Whiskies saw an immediate rise of $10.00 per bottle, followed by periodic hikes. A $49.95 Nectar d'Or now sells at $77.00 in most liquor stores. It is now a NAS whisky at 46% ABV.

Glenmorangie uses a number of different cask types, with all products being matured in white oak casks manufactured from trees growing in Glenmorangie's OWN forest in the Ozark Mountains of Missouri, USA. These new casks are left to air for two years before being leased to distillers Jack Daniel's and Heaven Hill for them to mature bourbon in for four years. Glenmorangie then uses the barrels to mature their spirit. The Original range will mature entirely in ex-bourbon casks, while the Extra Matured range of bottlings are transferred into casks that were previously used to mature other products such as wine, port or sherry for finishing. Rum casks are also used in finishing.

Glenmorangie also obtains small batches of other casks for finishing and release limited edition bottlings from these. Following acquisition by LVMH, Glenmorangie produced a rare limited edition aged in casks previously used to mature Château Margaux, the Glenmorangie 18yo 'Extremely Rare' (43%, OB, Bottled +/- 2010). These bottlings are now extremely hard to find and are priced accordingly.

Approximately 85 per cent of the whisky that is distilled at Glenmorangie is sold as a single malt. The rest is used in blends like Highland Queen. Glenmorangie previously bottled Drambuie in a joint venture with the Drambuie Company. (This arrangement ended in 2010).

Port Finish: Glenmorangie Quinta Ruban.

Sherry Finish: Glenmorangie NAS 'Lasanta'.

Madeira Finish: Glenmorangie Madeira Wood Finish, a fruity, creamy whisky with a slight orange hue. (Stopped in 2007).

Sauternes (Burgundy) Wine Finish: Glenmorangie Nectar d'Or

American Contribution

To an American, this is a little disorienting. The Scots have always credited their noble spirit to peat smoke, sea air, water filtered through granite and heather and the like; in brief, to environmental factors that a French winemaker would consider terroir. We Americans have been the ones to dwell on the flavour whiskey picks up from the barrel.

American law spells out exactly what kind of barrel you have to use if you want to call your whiskey Bourbon. It has to be made of American white oak, charred on the inside, and brand-new. Once you've aged any whiskey in it, it can never again be used for Bourbon.

As a result, there are always a lot of used Bourbon barrels lying around. Scotch distilleries have long bought them up for ageing their whisky. To anybody who asked, they've explained that the Bourbon has helpfully extracted all the barrel flavours that would obscure the subtleties of Scotch.

How things have changed! These days many Scottish distillers are exploring the effects of used wine barrels, which add unfamiliar fruity notes. Some are even experimenting with new Bourbon-type barrels, which contribute the familiar vanilla and caramel flavours of Bourbon.

Wood finishes are also spreading from single malts to blended Scotches such as Grant's and the Famous Grouse. (The Grant's aged in ale barrels has a very attractive roundness and fullness -- too bad we can't yet get it in this country.) 

About half the distilleries making wood finishes are in the area east of Inverness known as Speyside. Since Speyside is close to wood-finish pioneer Glenmorangie and known for the delicacy of its whiskies (compared with the smoky island malts), this area is an ideal place to explore the world of wood. The Speyside most familiar to Americans is the Glenlivet, the top-selling single malt in the United States. Glenlivet is aboard for the idea of adding nuances from barrels, but strikes a classical tone, dubious about all these wine flavours.

First posted in 2009.