Scotch Malt Whisky Society owner, The Artisanal Spirits Company, has reached agreement with Santander on a £35 million facility, an increase of £13.5m on its previous deal.
The Royal Bank of Scotland’s £21.5m revolving credit facility has been fully repaid, along with £500,000 in other loans.
Other borrowings outwith the new Santander facility will be repaid in due course.
As previously announced, first half net debt rose to £29.5m (H1 2024: £27m) due to US sales phasing. The company expects a reduction in H2 as profits come through, though some US cash receipts will fall into FY26. It believes net debt has peaked as stock investment shifts to replenishment.
Andrew Dane, CEO of The Artisanal Spirits Company, commented: “We are committed to continuing to ensure that the business is “future-fit” for the opportunities ahead and I am delighted to announce the completion of the new facility with Santander that contains a longer term, greater headroom and lower margin than our existing facilities.
“This refinancing supports our broader strategic initiatives and delivery of results in line with expectations.
“We continue to diversify our revenue streams, supported by a rigorous focus on cost discipline and operational efficiency, where we are actively streamlining our cost base, and this reduction in interest rate further supports this drive.”
Plea to Chancellor
Drinks industry trade associations have urged the Chancellor Rachel Reeves to support spirits producers with a multi-year duty freeze in November’s Budget.
In an open letter, the Scotch Whisky Association (SWA), UK Spirits Alliance (UKSA), the Welsh Whisky Association, the English Whisky Guild and Drinks Ireland have said repeated rises in excise duty continue to damage the spirits sector and its supply chain, most notably hospitality.
Excise duty on alcohol has increased by 14% in the past two years as inflationary uplifts to the original 10.1% duty rise have taken effect. Recent receipts from HMRC show that spirits duty revenue continues to fall, down £700m in the two years since the 2023 increase compared to the same period before duty was raised. Spirits duty, which has seen the largest duty rise, also shows the largest fall in revenue among all alcohol categories.
The letter to the Chancellor highlights that while spirits make up just 15% of the alcohol units sold in the on-trade, they represent well over a third of profits, meaning they are “a lifeline” to many hospitality venues. UKHospitality, which represents hospitality businesses around the UK, recently joined the SWA’s call for a duty freeze, noting that the “disproportionate tax burden” impacts the entire supply chain including distillers.
The groups have warned that any move to increase excise duty in November’s budget would fly in the face of the government’s growth agenda, impacting business confidence and hitting jobs, investment and growth.
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