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Chapter 2: Part Two - Experimentation and Closure; “Heavenly Peated"

 

 

On 22 December 1976, the company Minutes recorded a transfer of shares, giving Hiram Walker total control of the Ardbeg operation. Six months later Hamish Scott was replaced as manager by Robbie MacArthur, who wasresponsible for overseeing the renovation of the distillery, including the demolition of some buildings. The house attached to the back of the kiln was removed, as was the warehouse fronting the sea. Robbie McArthur came from. Speyside and lived in a caravan during his time at Ardbeg, with just occasional visits from his wife on the mainland. He did not stay on Islay for long.

John Black, who is now manager at Tullibardine distillery, was offered the manager's job at the end of 1977 and visited the island with his family before making a decision. "Now I had never been on Islay before," he says, "and we arrived when it was dark, wet and raining. We went up to the distillery, hung about for a wee while then went up to the hotel at Kildalton. The next day we were away, and that was my first experience at Islay. I just wasn't impressed. My two daughters were also at the wrong age to change schools, so I turned down the job. After that I agreed to go out for four weeks at a time, rotating with two other brewers to support the local man Duncan Logan."

Don Raitt subsequently became manager at Ardbeg, but John Black was considered a valuable asset due to his experience working with floor maltings, having started his distillery career in the makings at Cardhu distillery on Speyside. "Soon I got used to the place," recalls John, "and was getting to know all the boys, so when I was offered the job to support Don Raitt as assistant manager in 1979, I took it and moved over."

As Hiram Walker's then Group Distilleries Manager Ian Miller recalls, "Until Ardbeg came along our malt distilling operations were centred on Speyside, but Ardbeg was physically far away from that area. The company decided Ardbeg should become my baby, and I first visited it in December 1976, when I had been appointed Group Distilleries Manager. I was responsible for the operation of the distillery and for getting the renovation project up and running and I generally went over about once a month after that. When we acquired it, the place was in a very poor physical condition, and while we demolished some buildings, we also spent a lot of money elsewhere, including in the maltings which were in a very poor state, and on wiring and various electrical items.

"By the time Hiram. Walker took over, a number of the old buildings had already been demolished —some of them were not much better than hovels. If Hiram Walker hadn't taken it on the distillery would probably have closed and crumbled away. In the makings, a lot of the timber was rotten and I don't know what exactly kept the floors up! We spent around £1 million on the distillery, so Hiram Walker was serious about Ardbeg, though the whisky was certainly only seen as a component of a blend for them.

"We ran both sides of the maltings, and they were producing a very heavily-peated malt. It went into the McNish blend and various others, as well as Ballantine's. It was not seen as a single malt at all, but then at that time single malts were not very important to the industry as a whole. Hiram Walker was a ‘blends’ company and from 1970 they had set about establishing a good distributor network and a strong marketing programme into Europe for Ballantine's. This effort enabled Ballantine's to become a major brand, and in using Ardbeg as a key component, Ardbeg's fortunes became dependent upon that of Ballantine's."

John Black recalls that "Some of the buildings were very run down, and rough, rough, rough! We spent a lot of money on the distillery, replacing the wooden washbacks and copper piping. In 1980 we put a new oil tank into the building with ‘Ardbeg’ painted on it and removed the old tank. It was taken away to Glasgow just as it was, un-emptied and hanging so far off the back of the lorry.

"One thing we did try was to peat moist malt that had been malted elsewhere, but it did not infuse because it was too late in the process. There was a good atmosphere at Ardbeg with mostly young fellas working the malting floors. They used to have great fun seeing who could have the best section or could turn the malt the quickest. After the men had done the filling of the casks and stowed them, they got a dram. I remember one shift worker who lived in the big house was awoken by his wife to join the back of the queue to get a dram. He claimed a dram even though he had not done the work, then went back to bed! Seems his wife couldn't bear to see him miss out on a free dram."

Soon, Ardbeg was at the centre of a unique experiment with peating levels, as former Hiram Walker master blender Robert Hicks explains. "When Hiram Walker took 100 per cent control of Ardbeg we had rather more capacity there than we could really use, and it was decided to do something different with it. We owned Robert Kilgour's maltsters in Kirkcaldy, and from 1978 to 1981 we sent over plain malt and ran both plain and peated batches of Ardbeg. The unpeated spirit was called Kildalton, and it developed into an Islay malt that you could use as a ‘normal’ whisky for blending purposes." (See Chapter Six.)

The recently released 10 -year-old bottling labeled at 70 proof was changed in 1978 but this too was short-lived due to consumers' apparent difficulty in appreciating the challenging malt.

Consequently the maltings and distillery closed on the 25th March 1981

Despite the innovation of producing Kildalton in addition to ‘regular’ Ardbeg, Hiram Walker had not owned Ardbeg for long before the Scotch whisky industry as a whole began to feel serious repercussions from the years of over-production in which it had indulged.

Consequently, the maltings and distillery were closed on the 25th March 1981, with Hiram Walker holding a large amount of Ardbeg stock that had to be `managed out.' As Ian Miller points out, "It wasn't a whisky you could use a lot of in a blend." After 166 years of continuous production, apart from the enforced closures during the war years, Ardbeg fell silent, and few expected that the distillery would ever commence production again.

According to John Black, "at the end of each day we used to sit down and have a dram of Ardbeg. It was a nice place to sit and discuss the day's work for half an hour, but all that's changed now. I was quite sad to see it shut down. Having knocked down some of the derelict building in 1977 the place was looking really nice." Later, in 1981, the big, old house by the shore was demolished which by then was in a very bad state. For some unknown reason the four warehouses behind the big house were also demolished with- the tiles and fine, heavy roof timbers and even the corrugated iron being cannibalised and sold off.

 

 

Hiram Walker had been a cash-rich company which had previously embarked on an ongoing programme of acquisition. Around 1980 however, they were faced with a hostile takeover of their own and so decided to merge with the Home Oil Company and the Consumers Gas Company - major suppliers of oil andgasto Canada. This resulted in 71 per cent of its commercial interests being in oil and gas and the remaining 29 per cent in distilled spirits.

Due to falling oil prices in 1981, the company was forced to make some valuation write downs and tried to reduce debit. No doubt Ardbeg's closure was part of this process. In 1986 Gulf Canada, owned by the Reichmann family, attempted to acquire Hiram Walker. As they were only interested in the oil-related side o f the business, the Reichmann's approached Seagram & Sons Ltd to buy the drinks operation. Hiram Walker therefore agreed to sell its liquor division to Allied—Lyons plc in order to raise cash to fight the takeover. The whole affair was complex and acrimonious, and Allied did not take control until 1987.

 

 

Ardbeg was to remain closed until October 1989; two years after Hiram Walker's liquor operations hadbeen taken over by Allied Lyons plc for approximately £1 billion. At that time, Allied Lyons plc became Allied Distillers Ltd. During the distillery's ‘silent’ period Don Raitt stayed on as operations manager and continued to fight for its survival. He was there to celebrate its re-opening, remaining in the post for a further six months.

In January 1990 Allied Distillers Ltd acquired the spirits operation of the brewer Whitbread & Co Ltd, which included Laphroaig distillery, where lain Henderson had recently been appointed manager. Ian Miller makes the point that "Once we had Laphroaig as well as Ardbeg there was no need for two managers, one could run both distilleries, so after lain Henderson had been there a while, Don Raitt moved on to Pulteney in Wick. We were extremely fortunate in lain and his wife, Carol — they provided a very stable period."

By this time, the level of the ‘whisky loch’ was beginning to fall and the outlook for Scotch whisky was altogether brighter, with export levels on the rise (See Newsletter page 55). lain Henderson says "Allied had just entered into a joint venture with Suntory to promote the Ballantine's blend in the Far East, and so it was anticipated that greater quantities of malts would be needed for the blend. Accordingly, the decision was taken to reopen Ardbeg. When I arrived, the distillery was in working condition, but was seriously run down, with warehouse roofs falling in.”

Master Blender, Robert Hicks was instrumental in getting Ardbeg up and running again. Like Henderson, he noted the dilapidation of parts of the distillery site, saying "The distillery had suffered during the seven years of closure. We put a decent amount of money in to start it up and to renew things. However, major capital expenditure would be needed to bring it back to a pre-shutdown position.

"I flew over to Islay from Glasgow to help with the setting up. Essentially, I had been sent over to `tune' the still. The Ballantine's blend was quite sweet and fruity, and although Ardbeg was a lovely whisky, it hadn't the sweetness we required for Ballantine's

Over the years, Hiram Walker had developed a method of getting sweet, fruity spirit from all its stills, tuning them to give the high esters, the really sweet notes. They had been running at about 30 minutes and I brought the cut down to 20 minutes. I think it is down to about 15 minutes now, while Laphroaig runs for about 45 minutes.

"Until it closed in 1981, Ardbeg had been running consistently at 80-90ppm on the making floors, although the malt could go to 100-110ppm because it's just coating. When the distillery re-opened in 1989 Allied took the decision not to peat so heavily so that the spirit was more usable in blends. 45ppm was the aim and Port Ellen Makings was employed to supply malt, although it was initially just at 30-35ppm."

Laphroaig and Ardbeg manager Iain Henderson had first worked on Islay at Bunnahbahain distillery, where he was employed as the engineer. He then spent 14 years at Glenlivet on Speyside before returning to Islay to manage Laphroaig. "Some of the old staff who had previously worked at Ardbeg were re-recruited," he recalls, "and when the place was running we had six operators. When it reopened, that meant for a while every distillery on the island was working, except, of course, for Port Ellen. When I went there Ardbeg had 22,000 casks in the warehouses. Quite a lot of stock! It was all for the Ballantine's blend, though Hiram Walker had bottled some as a ten-year-old. However, Allied had no intention of selling any as a single malt.

"I put in a lot of hours at Ardbeg. The spirit was very inconsistent when distilling started, and to improve the consistency one thing we did was to take more care in the milling process. At that time the purifier on the spirit still wasn't working, it was blocked off because it had cracked. The distillery was run pretty quickly because what Allied wanted was bulk. Part of the inconsistency was also due to inaccurate low wines to feints ratios. There isn't an automatic balance at Ardbeg, and one of the problems was that all the low wines and all the feints had been pumped into each charge. We eventually got it balanced and running well.

"In1990 we made half a million litres of spirit, because of the potential growth in sales of Ballantine's, and because it's not economic to run a distillery like Ardbeg on a small scale. It makes sense to run it full out or not at all. We worked a five-day week, but had longer silent seasons than at Laphroaig, maybe lasting 12 weeks."

However, ownership of Laphroaig and Ardbeg presented difficulties for Allied Distillers Ltd, as Ian Miller explains. "Ardbeg became a problem for us because Laphroaig was selling well as a single malt. We would have had a problem trying to market two heavily-peated Islays." Robert Hicks comments that "Someone once said ‘You never want to own an Islay distillery,’ and Allied ended up with two! By 1992 we were selling quite a bit of malt, not a lot, but about 20,000 to 25,000 cases per year of Laphroaig.

"Allied decided to employ a Malts Manager and Jeremy Wetherhead was appointed to the position. In 1994 he projected that by 2010 he would have Laphroaig selling 90,000 cases a year, which was four times what we were selling then. We actually passed that target in about 1997/8. Jeremy wanted to sell Ardbeg too, but he did not appear to get the support, so only a very limited amount was bottled. We decided to keep Ardbeg running, and while we didn't actually put it up for sale, we let it be known we were open to offers. It was a case of keeping it running or it would fall to bits."

Between 1991 and 1995 Ardbeg was operating at around one-third of its capacity, but in July 1996 Allied Distillers closed the distillery down once again. lain Henderson notes that "Towards the end, we managed to extend the life of the distillery by about six months when the wash charger cracked and we had to bypass it.

"I'd always prefer to run distilleries rather than shut
them down, and when it came to closure there was 
the chance for any of the guys who wanted it to move to Laphroaig, but nobody did. The six operators all took the redundancy package and the place became nothing but a warehouse. The Laphroaig warehousing squad worked it. We emptied some of the warehouses with bad roofs, put the casks into the better warehouses, and a lot was taken to Allied's Dumbarton site. Some of the warehouse roofs were repaired while the distillery was closed.

"There was a feeling that it would be good for Laphroaig if the whole Islay category was doing well"

"The official line was that it was closing because the company had two distilleries side by side and they would never market them both as single malts. Ardbeg was surplus to Allied's requirements. I had to show, around people who were interested in buying it. Suntory wanted it, the Hillman family who owned Burn Stewart Distillers at one time wanted it, Chivas looked at it, Glenmorangie was interested, and so was Mark Reynier."

Mark Reynier was an experienced wine and spirits merchant and founder of the London-based independent bottlers Murray McDavid Ltd. In 1993 he had commissioned Allied Distillers to fill 100 casks of Ardbeg, and as he recalls, "When we asked if they would distil another batch for us, they said no, so we asked if we could buy the distillery. They said no to that, too!

"I came up to Islay with my business partner Simon Coughlin in February 1996 to look at Ardbeg, and I was bewitched, not so much by the whisky as by the setting. I'd pestered Allied to sell Ardbeg to us for several years, and even gone to their offices in Bristol, where I was told that they were prepared to sell the distillery now, and I was welcome to bid for it. At a second meeting I was asked to put a bid on the table. I'd been professionally advised that £4 million was the right figure, given the level of stock and just how bad a state the place was in."

Iain Miller's view of the sale of Ardbeg is that "Allied was very responsible and didn't want to sell the distillery to just anyone. There was a feeling that it would be good for Laphroaig if the whole Islay category was doing well, and if Ardbeg was being successfully marketed by someone. Allied was not committed to selling to the highest bidder. Glenmorangie was seen to have done a good job promoting its single malt, and it was thought they would invest in Ardbeg and do a good job there too. "

Iian Henderson comments that "I couldn't understand the philosophy of selling the distillery to a competitor who was going to spend money on it and create a rival to Laphroaig." Nonetheless, in February 1997 Glenmorangie plc acquired Ardbeg distillery and stocks for a price of 47 million, of which £5.5 million was the valuation of maturing spirit. Another, happier, chapter in the chequered history of Ardbeg was about to unfold.

 


Barley ready for malting at Ardbeg

 

Ardbeg Distillery is to be found on the South East coast of Islay. Built close to the waters edge it overlooks the coast of Kintyre, and on a clear day the coast of Ireland some 20 miles South, may be viewed.
Surrounded by heather covered hills supplying an ample quantity of water, the chief characteristic being its softness and purity, it was ideally situated for both the smugglers and the original founders of the Distillery; the former in operation for many years until their practices were discovered and the place destroyed, the founders, who built on the original site and were registered according to the Government requirements in 1815.

Situated at Such a far distance from the nearest port, (3.5 miles) it very quickly became a thriving community; forty families were housed by the company and a small two teacher school established. (With the movement of time and modern methods of travel, only eleven families remain, the other employees travelling from all parts of the island). Unlike the other Distilleries on the Island, Ardberg was not only able to boast a ‘pier’ but a regular passenger, mail and cargo vessel, twice weekly; not only a valued service to the community, but an added prestige to the Distillery.

Ardbegs’s distinctive flavor has played a large part in its continued demand, no less so than in its export to the States during the period of prohibition. Indeed, it was one of the few Distilleries to continue production during the depression years.

Despite installation of new plant, Ardbeg has remained faithful to the ttraditional methods of production of Malt Whisky. Peat plays a major part in the smoking of the malted barley, the flavor of which is predominant in the final product; no less important are the gleaming copper stills, the shape of which have remained unchanged since installation.

Only in the latter years has Ardbeg bottled on its own behalf. Previously the greater part was utilized in the blending of established and well recognized brands of whisky. Despite the greater demand on Ardbeg, production has increased at a controlled level. (now standing at 400,000 gals, per Annum) thus maintaining the unique quality that is ‘Ardbeg.’

 

 


 Traditional turning and airing at Ardbeg; Gilbert Johnson turning the malt floor at Ardbeg

 

How We Began

 In spite of Scotch whisky’s ancient origins, it is only in the past few decades that is has featured prominently as an international item of trade. Although it has been the world’s most travelled whisky since British Colonial times, Scotch began to rise to its present pre-eminence in world markets following the ending of prohibition in the United States in 1933.

But even before that, in 1930, a major Canadian distilling company, Hiram Walker-Gooderham and Worts Limited, was far-sighted enough to seek a stake in what was to become the world’s most sought-after whisky.

To ensure a guaranteed share of supplies of the best Scotch Whisky available, it acquired an interest in three Scotch whisky companies. This was the basis of the formation of Hiram Waler and Sons (Scotland) Limited, as well as the decision to build at Dumbarton the then largest grain distillery in Europe.

The original Hiram Waler, a grain merchant from Massachusetts, had by 1859 built his first grain distillery on a 250-acre site on the Canadian bank of the Detroit River, where the eponymous town of Walkerville now stands. This flourished successfully, becoming a major Canadian enterprise. In 1926, the Hiram Waler business was acquired by Toronto businessman Harry Hatch and his associates, who merged it with another old-established firm of distillers he had acquired only two years previously, Gooderham and Worts.

Since then, the merged organization has become an international group, the third largest distilling company in the world. And in 1980, Hiram Walker-Gooderman and Worts Limited diversified into the energy field by merging with another Canadian company to form the present holding company for Hiram Walker and Sons (Scotland) Limited called Hiram Walker Resources Limited. Its policy of continuing heavy investment since 1930 in the expansion and development of Hiram Walker and Sons (Scotland) Limited has been of great benefit to the Scotch whisky industry and to Scotland. But another important contribution has been the provision of a highly efficient world-wide marketing organization which has played no small part in enabnling Hiram Walker’s brands ot be available for discriminating consumers in almost every part of the world.

Since its entry into the Scotch whisky business, the Canadian parent company has shown a high degree of respect for the jealously guarded traditions of Scotch whisky production and this is reflected in the management autonomy of its thoroughly Scottish subsidiary.

 


Ardbeg distillery from the southwest, c1981. Note that all the warehousing and the big house on the shore still stand, but were subsequently knocked down later that year.

 

ALLIED DISTILLERS TO RE-OPEN ARDBEG DISTILLERY

A further indication of the recent upturn in the Scotch Whisky industry was given when Allied Distillers Ltd. Part of the Allied-Lyons Group, announced that the Company is to re-open Ardbeg Distillery on the island of Islay.

The announcement comes only a few weeks after Allied Distillers purchased two mothballed malt distilleries from United Distillers with the intention of returning them to full production at an early date. The re-opening of these three distilleries is a resulttt of the continuing steady growth for Allied Distiller brands.

The re-opening of Ardbeg will create ten jobs on Islay and this will supplement the 25 new jobs created at Imperial and Glentauchers Distilleries which are located in the Speyside area of Scotland.

The company has said the recruitment would commence immediately with Ardbeg being operational again before the end of the year.

Ardbeg is a distinctive malt whisky which will be used mainly in blending Ballantine’s Scotch whisky.

David Jarvis, Managing Director of Allied Distillers Ltd, said: “We are delighted to reopen Ardbeg. This represents a hat-trick of distillery announcements over the past few weeks and is indicative of our belief that good times are ahead and set to continue for the Scotch Whisky industry.

“Allied Distillers is a major player in the industry with our brands Ballantine’s, Teacher’s, Old Smuggler and Cream of the Barley and the re-opening of these three distilleries is a strategic move in line with our overall plans for the future development of the business. We are pleased that this fine distillery will be back in production very soon.”

 

ARDBEG RE-OPENING

Increasing demand for Ballantine’s Scotch whisky around the world had prompted Allied Distillers Ltd (the parent company of George Ballantine & Son Ltd) to re-open the Ardbeg Distillery, which contributes an exceptional malt whisky to the Ballantine’s blend.

First established in 1815, Ardbeg ceased distilling in 1981. However, the Manager, Don Raitt and his skeleton crew have kept the distillery in working order and continued supply of all Ardbeg malt whisky which had been stockpiled for use by Ballantine’s and other blends.

Ardbeg is situated on the south-east coast of the island of Islay in an isolated area of great natural beauty. The malt produced there has a unique peaty flavor and also benefits from the exceptionally soft and pure waters drawn from nearby lochs Uigidale and Iarnon.

 The re-opening of Ardbeg will create new jobs on Islay and its testimony to the recent upturn of the Scotch Whisky industry. It follows the recent re-opening by Allied Distillers of the Imperial and Glentauchers distilleries which are located in the Speyside area of Scotland.

Accoridng to Allied Distillers Managing Director, David Jarvis: “We are delighted to re-open Ardbeg and pleased that this fine distillery is bacvk in production, The re-opening is a strategic move in line with our overall plans for the future development of the business and is indicative of our belief that good times are ahead and set to continue for Ballantine’s and the Scotch Whisky industry.”


Cheers! Don Raitt, Manager of Ardbeg, toasts the re-opening of the distillery

 

 

WHEN IN KYOTO…


Resplendent in the Kimono, Ballantine’s Chairman David Jarvis and Managing Director Mark Butterworth could only be in Japan. But what were they up to?

 

 

 


Written by Gavin D Smith & Graevie Wallace

 

The text is an excerpt from "Ardbeg: Heavenly Peated" (pp. 45 - 55), written by Gavin D Smith & Graevie Wallace, published 2018 by Hogback Publishing.

 

 

 

 

 

 

 

 

 

 

 

 

 



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