Diageo to Build $75 Million Distillery to Make its First Chinese-Origin Single Malt Whisky

Diageo has recently announced the site for their first whisky distillery in China, as the company looks to benefit from the spirit’s growing demand in “the world’s largest beverage alcohol market”.

Located in Eryuan County in Yunnan Province, the distillery will cost around $75 million to build and will produce Diageo’s first Chinese single malt whisky. Details of this enormous investment were revealed at a ceremony in Eryuan on 2 November 2021, which was attended by a number of provincial government officials, industry representatives, and members of the local community.

Sam Fischer, President of Diageo Asia Pacific and Global Travel, explained: “China is the world’s largest beverage alcohol market and the demand for whisky is growing rapidly among middle-class consumers who are keen to further discover and enjoy fine whiskies.”

He added: “Today we celebrate another significant step forward, and one which builds upon our local insights and combines those with Diageo’s global whisky expertise in order to delight the next generation of Chinese whisky consumers.”

The alcoholic-beverage market in China has grown exponentially in recent times. According to a report by Business Wire, Asia Pacific was the largest region in the global alcoholic-beverages market, accounting for 42% of the market in 2020. With this rising regional demand, it is clear to see why Diageo – who also own renowned Scotch whisky brands such as Talisker and Johnnie Walker – has decided to tap into the Chinese market.

According to the press release, the 66,000 square meter site for the Diageo Eryuan Malt Whisky Distiller has been “carefully selected for its temperate climate, rich natural biodiversity, and access to natural spring water that is a source of the second largest highland lake, Erhai Lake, in Yunnan.”

On this point, Sam Fischer stated: “The natural surroundings and the Eryuan landscape will allow us to craft a world-class, China-origin, single malt whisky that will capture the imagination of premium whisky lovers in China.”

The site will also feature an “immersive and interactive visitor centre” in an effort to boost the local tourism industry. Diageo has pledged that both the distillery and the adjoining visitor centre will “incorporate local cultural elements and embrace the region’s natural landscape”.

Notably, this distillery will be shaped by the Spirit of Progress initiative that Diageo announced last year, an ambitious sustainability plan that promises the company will be carbon neutral across its direct operations by 2030. Accordingly, the distillery will be a zero-waste site; use renewable and clean energies; and recycle all the water it uses. Construction of the distillery is expected to begin in early 2022.