C&C has done well enough out of spirits. The division has remained consistently profitable while the rest of the company lurched from boom to bust in recent years. But it has definitely suffered from a lack of focus. Although the Tullamore Dew brand is strong, C&C failed to exploit that. In the last couple of years, two new Dews suddenly appeared - one a 10-year old blend, the other a 10-year old single malt. As if that was not confusing enough, the two whiskeys are made in different distilleries (Midleton and Cooley).
C&C has a great cider product (Magners / Bulmers) that it has been pouring its energies into, along with a more recent sideline in beer to compensate for the seasonal nature of cider sales. No doubt they can use the money from flogging the spirits division to continue the push into long drinks.
The interesting question is: who will buy the whiskey business? Pernod Ricard makes Tullamore Dew on C&C's behalf so taking the brand in house would give them a bigger return on something they are making anyway. But they already have a global Irish whiskey brand in Jameson and have shown no particular interest in building their other brands (Powers and Paddy, in particular) to compete with it.
Diageo owns Bushmills which is due to go head-to-head with Jameson in the next few years as maturing stocks are built up. Would they want another whiskey that is made by their rival? Would they move its manufacture to the Bushmills distillery, a distillery that only makes single malt?
It would be great if Cooley could find the money to pick up Tullamore Dew. They own the stills from the old Tullamore distillery and the sales volume of Tullamore Dew would allow them to fire those stills up again. But that's a hefty investment for a company that made a gross profit of only €3.3m in 2008.
I'll be watching this story very closely...