April 13, 2010 / 10:06 AM / in 8 years

English whisky startup takes on best of Scotland

LONDON (Reuters) - The centuries-old rivalry between England and Scotland has been fought out on the fields of battle and sport, but in the production of whisky the Scots have always claimed bragging rights -- until, that is, the English Whisky Company (EWC) showed up.

Four years ago, farmer James Nelstrop realized a life-long ambition when he set up a distillery in Norfolk in eastern England and his family are starting to reap the rewards of four years of hard work, a 2.5 million pounds investment and a lot of patience.

In December, St George’s Distillery -- the first and only registered whisky distilling company in England -- released its first three-year-old single malt -- Chapter 6.

In June, the EWC will start distributing 4,000 bottles of a peated three-year-old malt -- Chapter 9 -- that has critics drooling. Chapter 8, which was for sale pre-release has already sold out on pre-order.

”The EWC’s peated whisky is way up there and is of an exceptionally high quality,“ Jim Murray, international whisky critic and author of the ”Whisky Bible“ told Reuters. ”A number of Scottish distilleries just don’t achieve that.

“Partly, that is because EWC is a small company and they ensure what they are producing is of high quality and every cask counts. They are on the path to gold.”

Small is beautiful for the EWC, which employs just four full-time staff as well as 10 part-time workers. There are 10,000 people working in the Scottish whisky industry.

“We can’t compete on price, so we do everything to absolute levels of perfection and you can’t do that if you are producing millions of gallons of whisky,” said James Nelstrop’s son Andrew, EWC’s managing director.

The distillery sits atop England’s largest freshwater source, the Breckland Aquifer, which provides 6,000 liters of water each day to produce the EWC’s whisky.

“It’s absolutely crystal clean,” said Nelstrop. “It doesn’t get more perfect and we don’t treat it. It’s very hard, which gives our whisky a sweeter taste.”

Targeting a niche market of whisky connoisseurs, the EWC expects to shift up to 50,000 bottles this year after signing a distribution deal with Gordon & Macphail, having sold 5,000 bottles in 2009.

“The Scots are still making some cracking malt,” added critic Murray, who samples 1,000 whiskies a year. “But, sadly, some of the ex-sherry casks in Scotland are of pretty poor quality and that is a major problem for the Scottish whisky industry. By and large EWC’s casks are of superb quality.”

The Nelstrop family has not been afraid to tap the expertise of the Scottish whisky industry that is one of Britain’s top five manufacturing export earners, contributing more than two billion pounds a year to Britain’s trade balance.

The Nelstrops brought in Iain Henderson, who worked for the renowned Laphroaig distillery, for advice, while the EWC’s distillery was built by Scottish firm Forsyths -- “The Rolls Royce of distillery makers,” according to Nelstrop.

“When you build a distillery there is no absolute guarantee it will produce good whisky,” said Murray. “But, like the best distilleries around the world, the EWC has helped their cause by really paying attention to the small details.”

To bring in additional revenue, the EWC also organizes distillery tours -- and Scots are very much welcome.

“We probably get up to 20 Scots visiting a week, though a few grumble that whisky should only be made in Scotland,” said Nelstrop, who points out that high-quality whisky is also now being made in Taiwan, Denmark, Sweden and Japan.

As managing director, Nelstrop also mows the lawn, makes boxes to pack the whisky in as well as handling sales, marketing and advertising. Boardroom meetings with his Dad are held in the kitchen over a cup of coffee.

”We have managed to do this without using borrowing facilities,“ said Nelstrop. ”That’s why it has been possible. Who would give you money if the payback comes in 10 years?

“We’ve been a family of farmers for 600 years. It’s like planting a wood, one day a generation of the family will benefit. If you want an immediate return this would never work for you.”

Nelstrop is a passionate advocate of the importance of manufacturing to Britain, which in 1997 made up of 20 percent of UK economy, but now contributes only 13 percent to UK Plc.

“We’ve put money into a commodity that has real value rather than equities that change by the minute,” said Nelstrop. “I’d rather have my money in whisky than in a bank that might go under. Nobody could see the crash coming. We were lucky -- timing was everything.”

Editing Steve Addison and Paul Casciato

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