Tomatin Distillery boss Stephen Bremner is expecting “difficult” trading conditions to continue as people slow down their spending.
He was speaking as accounts revealed the company made pre-tax profits of £10.2m in the financial period ending December 31, 2023, down from the £11.2m recorded in 2022.
The distillery reached a turnover of £31.4m. This was compared to sales of £31.2m in 2022.
Despite the distillery seeing a slight increase in turnover Mr Bremner believes people are not spending as much when it comes to scotch whisky.
Consumer drinking habits changed
Managing director Mr Bremner said: “2023 trading conditions were more difficult than 2022. The previous two years had been excellent.
“Industry wide most companies were flying high. But last year was more difficult for a couple of reasons.
“The demand for scotch whisky was very high in 2021 and 2022 but consumers drinking habits have changed.
“People got used to buying bottles of whisky and drinking at home with friends which had a significant impact on our sales.
“Last year because of high interest rates and inflation, consumer spending had slowed down.
“There was also a lot of stock in the supply chain as well. You probably had the perfect storm where there was too much stock and consumers stopped spending as much at the same time which as a result saw sales slow down.”
Japan a popular market for Tomatin Distillery
Mr Bremner has seen no change during the first half of this year.
He said: “This year is unfortunately a bit more difficult than last year. But it’s an industry wide thing. It’s not specific to Tomatin.
“Trading conditions are still pretty difficult this year and I’d expect it to continue for the remainder of this year and in to next if I’m honest.”
The Far East remains one of its “largest markets” with Mr Bremner saying 2023 was “great year of business in Japan”.
The strategic report accompanying the accounts said: “The Far East market remains one of our largest markets which is as consistent as last year.
“We continue to add to our core range for more consumer choices as well as to our limited editions to continuously promote the turnover figures.
“The company continues to focus on the development of its scotch whisky brands.
“The Tomatin single malt brand (cased goods) accounted for a significant portion of the company’s turnover.”
Turnover through bulk whisky sales increased by 45% while visitor centre sales were up by 28%.
Staff numbers have also grown at the distillery with 73 people employed in 2023 compared to 67 in 2022.
The accounts revealed this led to staff costs increasing from £3m in 2022 to £3.3m last year.
Tomatin Distillery visitor centre plans
The Japanese-owned company said it’s visitors centre continues to “play an important role in creating awareness for its brands”.
It had been hoped a new multi-million pound visitor centre would open next year but Mr Bremner revealed they are still waiting for planning permission to be granted.
He said: “We are still in the planning stage to get consent to move forward.
“Because market conditions have changed a bit the timeline is likely to change slightly.
“It’s hard to say when it will be but we are working with the planning department to get consent and make a call on how we progress things.”
It is hoped the visitor centre will include a new bar, tasting rooms and tours, and a blending academy where visitors can make their own blend of whisky.
There are also plans to create paths and cycle tracks in a landscaped area.
Two Japanese firms – Takara Shuzo and Okura – joined forces to acquire the business in 1986.
