In the annals of whisky history, few names evoke the same level of reverence or disdain as the Distillers Company Limited (DCL). From its formation in 1877 until its acquisition by Guinness in the heady 1980s, DCL’s story is one of strategic vision, adaptability, and an unyielding commitment to quality — and, arguably, a dose of raw capitalism. As we journey through the pivotal moments that defined DCL, we uncover how this powerhouse shaped the whisky landscape, influencing the industry as a whole, and the global perception of Scotch whisky.
The late 19th century was a time of immense change for the whisky industry in Scotland. Recognising the storms ahead, in 1865, a number of distillers formed a trade association to set prices for grain whisky used for blends. It was known as the Scotch Distillers’ Association. On 5 October 1877, this loose trade group was reborn as the Distillers Company Limited, and six lowland grain distilleries merged. The founding companies were: M Macfarlane & Co, Glasgow (Port Dundas distillery); John Bald & Co, Alloa (Carsebridge distillery); John Haig & Co, Fife (Cameronbridge distillery); McNab Bros & Co, Menstrie (Glenochil distillery); Robert Mowbray, Cambus (Cambus distillery); and Stewart & Co, Kirkliston (Kirkliston distillery).
Together they sought to create a unified force capable of controlling production, ensuring consistent quality, and competing more effectively in an increasingly crowded market. That’s one take. Another is that “they were canny Victorian capitalists who saw the benefit of scale”, according to whisky historian and author Dave Broom.
This unity significantly aided DCL in the wake of the 1898 Pattison brothers crash. Often referred to as the Pattison Whisky Crisis, it was a pivotal event that marked the end of the whisky boom of the late 19th century. The crash occurred when the prominent whisky blenders went bankrupt after years of fraudulent practices and reckless financial speculation. Their collapse led to widespread financial panic, resulting in the closure of many distilleries and the consolidation of the whisky industry. DCL emerged as a significant player in the aftermath, capitalising on the opportunity to acquire distressed assets, and further consolidate its control over the whisky market. One example was DCL’s purchase of the Pattison’s bonded warehouses in Leith. These had cost Robert and Walter Pattison an estimated £60,000 to build; DCL picked them up at auction for only £25,000. This shrewdness allowed DCL to strengthen its position, and lay the foundation for its future dominance in the whisky industry.
The turn of the century brought new opportunities and challenges. DCL embarked on an aggressive expansion strategy, acquiring numerous distilleries to consolidate its power. By 1914 it proclaimed itself to be the “largest whisky distiller in the world”. Notable acquisitions included John Haig & Co in 1919, a move that signalled DCL’s serious intentions in the blended whisky market. Haig, with its extensive blending expertise and established brand, provided DCL with a critical foothold. This acquisition spree was not merely about growth; it was about dominance.
However, this time was not without its challenges. The outbreak of the First World War brought significant restrictions on alcohol production as the British government prioritised resources for the war effort. DCL adapted by shifting some of its operations towards the production of industrial alcohol, essential for the manufacture of explosives. This diversification proved to be a critical factor in DCL’s ability to weather the storm of war.
As the Roaring Twenties dawned, the whisky industry faced one of its greatest challenges: Prohibition in the US. Enacted in 1920, Prohibition wiped out a key export market for Scotch whisky, and many distillers were scrambling to adapt. For DCL, the response was multifaceted and strategic. The company increased its efforts to expand to other global markets, particularly in the British Empire. In countries such as Canada, Australia, and, New Zealand, DCL had established strong distribution networks and partnerships; this successfully mitigated the impact of Prohibition. While the American market had vanished (officially, at least), these stable markets provided a lifeline, enabling DCL to continue its growth.
There was a deeply significant move in 1925 as John Walker & Sons and the recently merged Buchanan-Dewar, joined DCL on a share-exchange basis. These ‘Big Three’ were whisky’s largest blending houses. Two years later White Horse Distillers also joined. Despite the external turmoil of the world, DCL was in a controlling, though not monopolistic, position for years to come.
Broom writes: “The great irony of the DCL situation is that while it seemed like a corporate giant just devouring competition, they were actually at the forefront of improving the quality of Scotch whisky. The major element within DCL was the notion that if you were to take whisky to the world, you had to have a product that was consistent, had quality, and was available in volume.”
The onset of the Great Depression in 1929 brought global economic turmoil, and the whisky industry was not immune to this. With declining sales and mounting financial pressures, DCL was forced to make difficult decisions to remain solvent. The company implemented cost-cutting measures, including the closure of several distilleries that had been part of the original 1877 merger.
“The need for that consolidation was a matter of self-preservation… the only way that Scotch could survive was by the increasing consolidation that took place with DCL,” notes Broom.
Despite these challenges, DCL demonstrated remarkable resilience. The company’s leadership, including the likes of Sir Alexander Walker II (grandson of John ‘Johnnie’ Walker) — who had joined the board in 1925 when John Walker & Sons merged with DCL — augmenting the vision of the legendary workaholic William ‘Willie’ Ross.
Ross, the first outsider to be employed in this family-dynasty-controlled business, had risen through the ranks to become managing director and eventually chairman. His thumbprint was on so many of the bold moves that had led to DCL’s ability to navigate these turbulent waters. His vision for DCL was not merely one of survival but of strategic evolution. But Ross could also be merciless.
Through mergers and acquisitions, by the 1920s DCL owned all but one Irish grain distillery. As RB Weir notes in Distillers Company Limited and the Irish Whiskey Trade 1900-1939, “from 1922 all decisions affecting the Irish patent still (grain) industry were made in Edinburgh by the DCL board”. By 1929 they had all been closed, including a number of pot still whiskey distilleries. Weir, reviewing the minutes of board meetings from the time, identified several reasons for their closure, but, arguably, it was helpful to DCL’s mission to remove any competition from the market. In 1933, Ross himself declared, “Ireland is an irrelevance.” This statement was in many ways predicated by DCL’s direct hand.
“By the beginning of the 1930s, Scotch had staggered on, helped by Prohibition and the Empire market, but it was still tough. American whiskey had disappeared, so Scotch emerged bloodied but unbowed,” shares Broom.
As the 1930s drew to a close, Europe stood on the brink of another devastating conflict. For DCL, the lessons learned from the First World War were not forgotten. The company had already begun preparing for the potential disruptions that the Second World War might bring. DCL’s diversified operations, including its industrial alcohol and chemical divisions, meant that it was better positioned to handle the uncertainties of war. Moreover, DCL’s leadership had ensured that the company was financially robust, with sufficient reserves to ride out the inevitable challenges. The closures and cutbacks of the Great Depression had left DCL leaner but more resilient, capable of adapting to whatever lay ahead.
By 1939, DCL had solidified its position as one of Scotland’s leading industrial enterprises. Its influence extended far beyond whisky, touching on various sectors that would prove crucial during the war years. The company’s success was not just a testament to its business acumen but to its ability to foresee and adapt to the changing tides of history.
Following the Second World War, DCL continued to expand and adapt to the rapidly changing global market. The 1960s and 1970s were marked by a renewed focus on innovation and marketing, as DCL capitalised on the growing global demand for Scotch whisky. However, the industry faced challenges, including increasing competition and the need for modernisation. There were internal challenges too. While there was one DCL, the individual brands, such as Johnnie Walker, Dewar’s, Buchanan’s, and Haig were run as fiefdoms within the overall company, the same for the single malt distilling side of the business.
Despite the fact that Johnnie Walker was the best-selling Scotch in the world, by the late 1970s, DCL’s UK sales were stagnating. In the early 1960s the company had controlled about 75 per cent of the UK Scotch market; by 1984, the company’s domestic share was down to 16 per cent.
“Some sort of takeover was inevitable because DCL had moved away from its core function into so many other, different areas… it was a corporate failure,” notes Broom.
In 1985, James Gulliver’s Argyle group, which operated Fine Fare supermarkets and the Glen Scotia distillery, launched a hostile bid. The offer was knocked back, but to shore itself up DCL turned to brewer Guinness PLC as a ‘white knight’, inviting it to present a rival bid. This was huge news at the time, and in 1986 Guinness PLC, led by the ambitious CEO Ernest Saunders, acquired DCL in a controversial and aggressive bid, which was later found to involve illegal practices.
The takeover marked the end of DCL as an independent entity, but it also paved the way for the creation of a new global beverage giant. In 1997, Guinness merged with Grand Metropolitan to form Diageo, a behemoth in the alcoholic-beverages industry. Today, Diageo is the world’s largest producer of spirits, with a portfolio that includes many of DCL’s historic brands.
The legacy of DCL, with its deep roots in Scotch whisky, continues to thrive under Diageo’s stewardship, ensuring that the pioneering spirit of the Distillers Company Limited lives on in every bottle.
