Outlook: Highland fling

IT IS NOT hard to see why Brian Ivory found the offer of running a privately owned Highland Distillers one that he could resist. In organisational terms he would have been reporting to a holding company, which in turn reported to two parent companies which in turn answered respectively to a charitable trust and a family council.

But it is equally easy to see why Mr Ivory and the rest of the Highland board had no option but to recommend the Edrington-William Grant offer to shareholders, even though their preference was to remain a publicly quoted business.

After an opening shot, fired with exquisite timing on the Glorious Twelfth, the Famous Grouse distiller has been bagged with an offer that makes even the fancy price Bacardi paid for Dewars fade into the Scotch mist. Even if a foreign predator was prepared to enter the fray with a higher price, it would be difficult to break up this gathering of the clans. With Remy Martin's 9.5 per cent stake irrevocably committed and Edrington, which has only one shareholder in the form of the Robertson charitable trust, sitting on a further 28 per cent, this Scottish solution looks 100 per cent Sassenach proof.

A combination of four powerful brands in the shape of Grouse, Macallan, Glenfiddich and Grant's will certainly give the enlarged grouping critical mass. But will it be in the long-term interests of Scotland and the Scotch whisky industry?

This is at best debatable. In theory, private ownership should allow a more long termist and sensitive approach to the needs of this extraordinary industry. However, private ownership will exacerbate the problem whereby cash flow from Famous Grouse is used not to develop the business but to fund a long list of charitable causes, such as college education for the poor. It is not clear that further raising the Robertson Trust's exposure to Highland is either in its own or the company's interests.