July 25, 2016 – After a Scottish parliamentarian’s suggestion that Diageo turn over the title and rights to the long-closed Dallas Dhu distillery in Speyside to Scotland’s government, the drinks giant said today it is open to continued discussions on the idea.
In a statement provided to WhiskyCast, a Diageo representative noted that “we have engaged positively with Historic Environment Scotland since this proposal was first raised and made clear we have no wish to prevent or delay distilling from being re-established at Dallas Dhu if that is what HES wish to achieve. We will continue to engage positively with HES as they develop their proposals for the site.”
Moray MSP Richard Lochhead has long advocated for the resumption of distilling at Dallas Dhu, which has been closed since 1983 and is currently operated as a museum by Historic Environment Scotland. Lochhead told the Press and Journal last Thursday that government ownership of the site would make it easier to find investors to fund the necessary upgrades needed to resume production at the distillery. He urged Diageo to consider passing ownership of the site, its distilling and water rights, and brand name to the Scottish Government, telling the paper that “that will enable Historic Environment Scotland to properly explore all the options and quickly. Otherwise we may face more years of protracted negotiations between the actual owners, Diageo, and guardians of the site, Historic Environment Scotland.” Lochhead’s comments came following a meeting with the preservation agency’s acting chief executive at Dallas Dhu, which draws nearly 10,000 visitors each year as a distilling museum.
Dallas Dhu was closed in 1983 by Diageo predecessor Scottish Malt Distillers, Ltd. as part of a production cutback that also saw the closings of Port Ellen, Rosebank, Brora, Benromach, and several other distilleries. Unlike many of the other sites, Dallas Dhu was not stripped of its stills and other hardware, and the site was gifted to the UK’s Scottish Office in 1987 for use as a museum. In 1997, management of the site was turned over to Historic Environment Scotland, which is responsible for maintaining and operating the museum.
Feasibility studies conducted over the past three years have indicated that most of the distillery’s equipment would still be usable, with options ranging from a micro-distillery to resumption of full production. Advocates for a resumption of distilling at Dallas Dhu have argued that the sales of whisky from the distillery would help fund long-term preservation of the site while creating new jobs and attracting more tourists to the area.
Diageo receives no financial benefit from the distillery, but covenants put in place at the time of the 1987 transfer restrict the resumption of whisky production at Dallas Dhu. Scottish Malt Distillers put similar covenants in place when it sold many of its other former distillery sites. To this date, only two of the distilleries closed in 1983 have returned to production under new ownership: Benromach in nearby Forres resumed distilling in 1998 under Gordon & MacPhail’s ownership, and the covenant was relaxed at Bladnoch Distillery in Wigtown to allow limited production beginning in 2000 after the Armstrong family acquired the site. That covenant was removed when Bladnoch went into administration in 2014, and the distillery is being renovated under new owner David Prior with plans to resume full production.