Monday, October 8, 2012

Multinational Corporate Giant Diageo tangles with Anarchist/Punk Rock inspired BrewDog and gets Bitten!

The other day I was trying to figure out what Diageo (the world's largest multinational alcohol beverage company) was doing to their Johnnie Walker product line up.  You know they have discontinued my much loved Green Label, but they have also been tinkering with Gold Label.

Johnnie Walker Gold Label used to have an 18 year age statement.  Not so anymore.  The age statement has disappeared, and now it is Gold Label with the addition of the word "Reserve," but remains a blended scotch.  They have also recently introduced "Platinum Label."  It is the new 18 year old age statement blended scotch in the stable and priced in between Gold and Blue Label.

While web surfing on these weighty matters, I stumbled upon some unrelated and not so flattering stories about Diageo. 

Back in May of this year, The British Institute of Innkeeping held their annual awards dinner.  Weeks in advance of the awards ceremony, a small Scottish beer company, BrewDog, had been selected by committee as "Bar Operator of the Year."  Now, before I go any further in this tale, I gotta fill you in a bit about BrewDog because it has some relevance to a turn of events later in this tale. . . well, at least in my mind.

BrewDog operate a number of brew pubs in the UK.  In addition, they also produce about 120,000 bottles of beer a month for UK and limited international export.  Now, here is where it gets fun.  If you visit their website (click here) you are greeted by some hilarious, pushing-the-envelope, serious bad-ass, wannabe beer bravado:

"BrewDog is a post Punk apocalyptic mother fu*ker of a craft brewery.

Say goodbye to the corporate beer whores crazy for power and world domination.  Swear allegiance to the uncompromising revolution."

These guys got some serious attitude.  Especially when you consider past and present titles of their various beer bottlings: Punk IPA; 5 AM Saint; Sink the Bismarck and my favorite . . . Trashy Blonde.

They also pulled a publicity stunt by releasing "The End of History" ale in beer bottles made from dead squirrels (formerly roadkill - I'm serious).  Actually, they just put out a mere twelve bottles. Heh heh!  I suppose, animal loving, Brigitte Bardot will not be a corporate spokesperson for them any time soon.  I also guess when you don't have a big advertising budget you try by other means.

So, now getting back to our story.  BrewDog attend the awards evening, a gala dinner, and await the trophy.  At the dinner, Diageo people learn, for the first time, of BrewDog's imminent award, and one of them (a senior executive) threatens the event organizer that "under no circumstances" was BrewDog to receive the trophy.  If they do, Diageo will pull all future sponsorhip of the event.

So, you might be thinking at this point why would Diageo executives care about such an award?  You would be forgetting that Diageo owns a very respectable/world class stable of beers like: Guinness, Red Stripe, Harp, Kilkenny, and Smithwick's Ale.  (They also own a piece of a bar that would qualify them for the award.)

I also happen to think that BrewDog take great pleasure in launching subtle jabs (recall "corporate beer whores . . .") at the likes of Diageo.  So, I would imagine the last thing Diageo wants to see is an event it sponsors make an award to a competitor that does nothing but antagonize them and take the beer industry in directions it views with consternation (see The End of History ales above).  My point is:  there's a history between these two competitiors.

Any how, so what happened?

The announcer read out the award category and declared the winner was Diageo.  A Diageo executive hopped up on to the stage and accepted the trophy, complete with engraved plaque which read: "BrewDog: Bar Operator of the Year."  Meanwhile, BrewDog people and members of the awards committee stared in disbelief.

BrewDog did not take this turn of events laying down.  They went public with the matter on their blog and provided a quote from the chairman of the award committee:

"Diageo (the main sponsor) approached us at the start of the meal and said under no circumstances could the award be given to BrewDog.  They said if this happened they would pull their sponsorship from all future BII events and their representatives would not present any of the awards on the evening.

We were gobsmacked as you by Diageo's behaviour.  We made the wrong decision under extreme pressure.  We should have stuck to our guns and gave the award to BrewDog."

Shortly thereafter Diageo apologized.

Senior Diageo executive, Andrew Cowan, in damage control mode.

. . .

So, you may be wondering why am I writing about a screwed up awards ceremony?  First of all, I was shocked to read the stories.  I mean we are in 2012!!!  Isn't this the kind of dirty tricks, pseudo corporate Watergate type nonsense that doesn't happen anymore?  Evidently not.  Secondly, it reinforces my opinion that whisky award events are hardly independent/transparent evaluations of spirits, but rather just another opportunity for Diageo and other big spirits companies to promote their brands.

There is nothing wrong with marketing.  Just don't lie to the consumer by claiming this bottle or that 'won' a 'gold' medal!  Whisky 'competitions' should be replaced by whisky 'festivals' where companies present their wares and we, the people, celebrate them.  Whisky critics, master blenders and learned brand ambassadors can chime in too.  Some of those people we respect enough that we want to hear their thoughts.  Festivals of this sort ultimately help the consumer, taste and decide for themselves!  And . . . and the drinks companies benefit too by maintaining and hopefully expanding market share!

Accordingly, I have not wavered from what I wrote two years ago about the International Wine and Spirits Competition.  Another corporate marketing opportunity at best.  I always disregard such awards and medals trumpeted by the companies that own various scotch whiskies because I know they are nonsense.  Explore the IWSC site and see for yourself how many scotch whiskies won "gold."


Jason Debly

P.S.:  I really like BrewDog's marketing approach.  It is unorthodox, points a stick in the eyes of industry players, all the while having  a lot of fun doing what they do.  More power to them.

Diageo on the other hand really need to clean up their act.  In an unrelated matter they settled bribery charges in 2011.  Click here to read the Wall Street Journal article about yet another tale of woe.  

By the way, it should be noted that Andrew Cowan (pictured above) of Diageo was not the senior executive who threatened the BII organizer.  Mr. Cowan is the executive tasked with cleaning up this public relations mess.  An unenviable position to be in for sure, but he will probably succeed if he looks to other good corporate citizens such as LLBean.  While LLBean is not nearly as large as Diageo, it is a billion dollar company (privately held) with an impeccable reputation.  They worked hard to achieve such a reputation and more importantly maintain it.  They sponsor events in their field of commerce, but never have this kind of scandal.  Mr. Cowan will no doubt examine how his company got into this mess and plot a strategic plan to prevent it from happening again.  Of that I am fairly certain.  Call it a gut instinct.


  1. Reminds me about this one local restaurant. Kinda fancy, local ingredients, etc. They make a big fuss about not selling Coke and Pepsi products. But then sell almost every whisky Diageo makes. I mean, it's good whisky and I'll drink it, but just don't be all snooty about avoiding major corporate beverages if you're going to sell it.

    1. Don't get me wrong. I have no problem with successful companies, just unethical ones.

      Diageo are genius in their print and online advertising. The Johnnie Walker website is aestetically one of the finest on the web bar none. Moreover, Diageo is owner of some of the great malts like Oban, Talisker, Cragganmore and a host of others that I will never stop buying.

      So, for all their success they should be able to be ethical and do the right thing. Right? We should hope.

  2. Stick it to 'em, Jason! Booo, Diageo!

    I don't know whether to laugh or be disturbed by the squirrel beers... so I just did both.

    1. From what I can tell the squirrel beers were little more than a publicity stunt, but that's ok. It's a legitimate form of marketing, unlike threatening beer industry competitions.

    2. The interesting thing abut this for me is that despite being ticked off by the Diageo presumptuousness, I've got zero desire to drink a BrewDog beer. The squirrel bottles, although part of a super-high-proof Beer stunt, really disturb me. And I just get turned off by beers with names like "Trashy Blond" and don't buy them. Some other brewery makes a "Leghumper Ale." Yeah, not drinking that. That's just me responding to their ads, though. They knew the risk when they started their campaigns; so it goes.

  3. Last week, was in-store deciding whether to get a bottle of Cragganmore. Then, read "DIAGEO". Weirdly enough, attraction for it rubbed away some sort and ended up w/o the addition. I admit having perhaps an overt distaste for the commercialized.. feel?

    and now, after reading your post and being informed of such, *double nod on forgoing the purchase. I have no doubt the D***** company has some good stuff. But how reasonably good is the one product, which cannot be found elsewhere that is not as equally good (if not better)better yet..minus the big-fat-teenage-bully who benefits from selling you cookies he stole from young-kid-on-block

    good fuming post, thanks for heads knocked clear up!! haha

  4. I'd discarded long ago expectations that business is about such childish notions of award fairness. Few awards were ever based upon some similar abstract notion of meritorious, gentlemanly activity and accomplishment. No, most awards are continually "won" through application of money, competitive influences and market power. That is the world since day one. Diageo is doing its work to win, as it should and it has every right to do that. I never worked in the industry at any level, and I don't own Diageo shares, so I don't have a dog in the fight. But I think it's pretty naive for malt fans to assume that Diageo (or any like-minded event sponsor) is going to allow its forum to endorse anything other than what they see fit to endorse, whenever possible. Recall the fracas at the 2012 (British) Open, when event sponsor Rolex frantically attempted to prevent event winner Ernie Els from wearing his Omega watch when he appeared during closing ceremonies; Els refused. I support malt fans who wish to continue campaigns against Diageo, hoping that they realize that businessmen are in business to succeed, to dominate and control their environment. What Diageo did was fair, ethical, certainly legal, and it's also open to critique from folks who think it not any of those things.

    1. I do not think what Diageo did was 'fair' or 'ethical.' Where is the fairness and ethics in sponsoring a competition where an independent awards committee selects a winner in a category, and the sponsor (Diageo) not liking that selection overrules them? Don't call it a competition. Don't pretend impartial competition with transparency and then do the opposite. That is misleading and dishonest. Maybe we are only talking about brew pub (not Middle East politics), but nobody enjoys being lied to. It is not an effective strategy for expanding market share either.

      Is it legal? Maybe so, but if you are sponsoring events with the hopes of promoting your brand, treading close to the line of what's legal and what's not, to my mind smacks of bad business decision making.

    2. Anyway JK, thanks for commenting with your well thought out and different views. Take whisky, a multinational company and a competition and there is bound to be some kind of controversy, however minor in the grand scheme of things.

      I think my next post will be a lot more light hearted: Did Fred Flintstone ever reach for a bottle? Is that Cutty Sark I see in Russ Meyer's classic flick: "Faster, Pussycat, Kill! Kill!"

  5. I appreciate this post a lot. I have a huge mis trust of Diago, and a worried that the quality of whisky is going to suffer because corporations care about only money and know that there are enough people in the world who will take good marketing over quality every day, and they can abandon the small percentage of whisky fans who care about such things and still make lot's of money. Let's not forget that it has already happened to Cognac.

  6. Yes, this did kick up some criticism of Diageo, then there was the Legionnaires outbreak in Edinburgh at North British Distillery and then there were the 2012 special releases. The PR department much have been in overdrive in 2012. Rumours about buying back Port Ellen casks and then bottling them in this premium range...

    Diageo will be looking forward to 2013.

  7. It's funny how nonsense (sometimes highly offensive garbage) put out by the "little guy" is always considered good marketing but when one person in a HUGE corporation that employs thousands makes a mistake that may not represent the employer, the corp is evil, and unethical.

    Remember that the reason this story became public was that the "little guy" made sure it got out. Why? To gain advantage by poking "the corporate beer whores crazy for power and world domination." and suggest that we buy their product and "Swear allegiance to the uncompromising revolution."

    Tough choice: buy product from the unethical evil empire, or from a bunch of lewd and crude punks.


    1. Diageo do get beat up a lot. And a lot of it is just unfair, but this story was really there own doing.

      As for the marketing of Diageo, the work they do in print ads and online is the best in the drinks industry and I admire it.

      They really dropped the ball here though and take into consideration the bribery debacle described in the Wall Street Journal and you have a company that may have lost its way somewhat. At least in terms of the messaging and reputation they are conveying to the world.

      LLBean is a big company, not as big as Diageo by any means, but they have a stellar reputation. Diageo would do well to study how LLBean maintains a great reputation, and learn from it.

      A corporation is made up of people. People make a place. Sometimes the corporate culture needs to be shaken up. I believe this type of behaviour comes from the top down. I worked in Toronto for a large corporation and it was a great place for about 6 years, and then a corporate merger occurred and the people changed. So did the mandate and way they did business. And it was not for the better sadly.

      I think Diageo is still a great company, with a fantastic portfolio of products that is the envy of the rest of the industry. They just need to work on doing what they do better. They are a mature corporation that needs to spend serious time thinking about business ethics, their corporate reputation and their place in the world community. I am sure they devote sometime to such study, but it needs a makeover.

      Thanks for commenting Portwood, your views are always welcome!

      Now where is my Johnnie Walker Black Label . . .

    2. Good points. I commend you for your balanced writing.

      I was trying to caution against always rushing to David's side in a contest against goliath. I don't have all the facts about this case and know nothing about brew dog but "craft" brewers/distillers aren't always angels. They may play the part of helpless underdogs but they often use the same (unethical?) tactics as the "whores" they criticize.

      All companies make mistakes. When we hear about mistakes made by large companies they tend to be big ones! No one pays attention to mistakes made by small companies because, by definition, they affect very few people.

      Regards. I'll have a dram of the green label myself. Luckily I bought a few bottles as soon as I found out they were being discontinued. LOL


    3. Given the bottom line pressure that multi-nationals create for themselves and their direct competitors, it's natural to mis trust them more than the craft folks. Also, look at how de-regulated Brandy was allowed to become and thus what shit it now is. No average working person can afford a good brandy anymore, though plenty think that's what they are doing when they shell out nice chunk of change for Hennessey or Remy.


  8. Appreciate the topic Jason.

    Given their brand portfolio, Diageo no doubt has significant margin share in the whisky industry. To demand a different outcome for a minor award should have been beneath them. Getting or not getting that award could not possibly have any measurable impact on market share or bottom line.

    If you're the big dog, act like it. Show a little class.

    And BTW, my local Total Wine does not appear to be in any danger of running out of Green Label any time soon.

    1. Stock up on that Green Label because they have stopped bottling that lovely whisky.

  9. I'd read about this earlier, shortly after the incident occurred, and could not believe that an event sponsor would have that kind of influence (well, really, what did I expect, of course they have that kind of influence, but you never really expect it to be exercised). Poor judgement on Diageo's part, and excellent writing and balance on yours!

    As for Green Label, at last count there are about 45 bottles left in all of Ontario, and the LCBO has put a "Product Discontinued" label on the entry. I have two stocked up, and gave my third to my brother as a house warming present.

  10. Thanks for this well considered post and the lively ensuing discussion. I quickly overlooked this story when it broke in May. Part of it is that it seemed to be about beer - and I'm focused on whisky and part of it is that I have ambivalent feelings about Diageo and didn't want to think about bit. Part of me is grateful for Diageo's capital and investment in Scotch diversity. As Oliver Klimeck posted on a while back - Diageo's profitable blends fund the creation and maintenance of many more distilleries than the single malt market could support. This diversity creates opportunities for enjoyment because a tiny bit of the output of many of those distilleries is obtainable as single malt (or single grain) bottlings. On the downside, their marketing and focus helps ensure that a vast majority of the output of those distilleries keeps going into blends and helps create the scarcity of top drawer single malt that is driving the explosive price increases we are seeing there.

    Those price increases, by the way, are part of the reason why Diageo did away with Green Label (which was very low priced for what was in the bottle) and took the age statement away from Gold Label and gave it to Platinum. I await some head to head tasting between JW Gold 18 and JW Gold NAS - but I will not be surprised in the least to hear that the latter is less flavor dense than the former.

    Diageo runs a wide diversity of distilleries - but the majority of the output of all of them except, famously, the boutique distillery Oban, end up in blends. Sometimes, when I discover a cask strength independent bottler issue of a distillery like Mortlach or Linkwood and gasp at how amazingly good it is and then think about how virtually all that juice is pulled too young and put into JWRL and JWBL I get a little mad. When I visit a Diageo distillery and see the signs that say "Maximize Diageo Value" I wonder if that means a set of decision making that isn't about the excellence of the product. Indeed, I get the impression that excellent single malt goodness is incidental to the enterprise - not central to it. But I frequently put JWBL head to head against other blends and entry level single malts and it usually wins - and that's not accident - so perhaps I'm not being fair.

    When I hear about Diageo's release of premium single malt limited issues and see the prices well over 300 pounds sterling per issue - and many over 400 and 500 for issues that were half that price just a few years ago (i.e. Caol Ila 25, Talisker 25 and 30, - not just the Broras and Port Ellens that are slamming against the scarcity wall because they are closed) it makes me mad too. That scarcity is an engineered by-product of the fact that Diageo is focused on "Maximizing Diageo Value" by selling a whole lot of blended Scotch.

    That's why this rigged award stings so deeply. It's because it feels "of a piece" with a larger corporate dynamic that seems to be about Diageo protecting Diageo - not doing what's best for whisky lovers. Not by a long shot.

    So, thanks for not letting this story go off into la la land. I find I'm still angry - lo these months later. I share your reasons and have a deeper resonant set of complaints...

    Did you HAVE to build the maltings factory right on the grounds of the Port Ellen distillery? Really?

    Did you HAVE to put all the Linkwood and the Mortlach in the Black Label? And the Lagavulin in the White Horse etc... Now that palates are shifting and you are making serious money in single malt - can we have some more, please?

  11. Josh, thanks for commenting. You are so detailed in your opinions that I think I could have made a separate post. Thanks again!

  12. Diageo are chasing world rankings and volumes, which means blends. I've visited so many of their distilleries as part of the Classic Malts scheme and heard so often the huge percentage that goes into blends. Glenkinchie was something like 98%, which is probably a good thing as I've never enjoyed it.

    There is this feel of corporatisation of distilleries that lose their character. Being fortunate to have visited Islay earlier this month, I managed to get around all of the distilleries. And while Caol Ila was levelled and rebuilt, losing its historical character, prior to Diageo taking it over, it seems to fit the corporate mentality so well. It was to many on the tour a black hole dominated by rules and regulations. The essence of whisky was lost.

    Some of the 2012 Special are overpriced and no doubt over hyped; the London press event with tasting probably ensured this. It is a slick operation. In a way I'll be sad when stocks of Brora and their other silent distilleries have run dry. Yet it will be the revenge of those who worked at these distilleries that were culled in the 80's. Maybe a little long term planning would have avoided such a knee-jerk reaction and prevented the scarcity of aged malts we have today.

  13. The way I understood it, was that the award “Bar Operator of the Year 2012″ was awarded to a pub in Falkirk : Behind the Wall (BTW) who refused to accept it when they saw the engravings :-)

    BTW is, as well as Brewdog bars, also a nice pub, you have to go upstairs for the real ale and whiskies :-)


  14. Jason - thanks so much for bringing these to our attention - who may never have are the best!