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MEMORANDUM TO: JACK MCCONNELL, FIRST MINISTER FROM: XXX TOPIC: PERFORMANCE AND DEVELOPMENT POTENTIAL OF THE SCOTTISH WHISKY INDUSTRY DATE: 16/07/2007 CC: XXX This memo will look at the structure, conduct and performance of the Whisky industry and make recommendations as to its future. Structure: Most of the distilleries in Scotland are registered as Scottish-owned companies, but in fact the majority of the turnover is dominated by few firms and is externally controlled by non-Scottish companies1. The major players are divided into two groups: multinational drink manufactures such as Diageo, Edrington, Fortune Brands and LVMH, who dominate 50% of the market; and Scottish companies such as William Grant, Whyte and Mackay, and Loch Lomond Distillery, who control 16% of the market. The rest of the market is made up off other smaller distilleries2. Their products are similar, but each company has created his own brands and image. Barriers to entry are high, because of levels of required marketing expenditure, which...

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