Investors in spirits group Distil suffer hangover

SHARES in spirits group Distil, owner of Scottish gin and vodka brand Blackwood’s, fell sharply yesterday after it issued a revenue warning due to delays in getting approval to sell its key brands in the US.

In July, Distil revealed that it had agreed terms with two US distributors for Blavod Vodka, Blackwood’s Gin and Blackwood’s Vodka, subject to approval from the US Alcohol and Tobacco Tax and Trade Bureau.

Although at the time it expected approval to be granted by August, yesterday the firm said it had not yet received clearance or a clear indication of when it may happen.

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“We do not foresee any refusal, however, we were planning to have these permissions in time to have shipments in market and distribution established prior to the peak trading period,” it said. As a result of the delay, Distil said it was now clear it will not meet its projected levels of sales for this year. Although it is not yet halfway through the financial year, it warned that its full-year results will be significantly below current market expectations.

But the company also said that outside of the US, where the majority of its trading takes place, sales volumes have continued to grow, with Blackwood’s Gin up by 22 per cent year on year and RedLeg Rum by 48 per cent.

“We remain entirely focused on building our brands and broadening our distribution base, which is critical in this market, and have recently appointed distributors for RedLeg in Russia and Canada and for Blackwood’s in Portugal, Germany, France and Italy as per our planned expansion,” said executive chairman Don Goulding. Shares fell 19.5 per cent, or 0.2p, to close at 0.82p.

Blackwood’s Gin uses plant extracts such as angelica and wild water mint grown by crofters on Shetland. It was originally developed by Blackwood Distillers, which was founded in Lerwick in 2002 with a view to setting up Shetland’s first whisky distillery using funds raised by sales of gin and vodka distilled at an undisclosed location on the Scottish mainland. The firm later went into administration.