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The Clerk to the Transport, Infrastructure and Climate Change

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The Clerk to the Transport, Infrastructure and Climate Change Submission from John Walter of International Beam Global Spirits & Wine – 19 March 2008 I am writing in response to your committee’s inquiry into the ferry services in Scotland. Beam Global Spirits & Wine is one of the world’s leading spirit producers, and includes within its product portfolio Scotch Whiskies made at our Speyside (Ardmore) and Islay (Laphroaig) distilleries. Scotch Whisky is Scotland’s leading export industry, producing in excess of £2.5bn in earnings. Our comments relate specifically to ferry services to Islay. The ferry is a lifeline for the island, both for the wider economic and social infrastructure, be it tourism, schools or hospitals, or the essential inputs and outputs for the operation of the island’s eight Scotch Whisky distilleries. The sole operator servicing Islay is Caledonian MacBrayne (Cal-Mac). To date, it has proved difficult to achieve the level of services for businesses looking to a necessary level of reliability and predictability. The problems are caused by a combination of: Insufficient sailings & lack of transport capacity available on the vessels; Out-dated and poor quality of the island’s facilities to receive the ferry vessels; Short-sighted planning for the future. Insufficient Sailings & Lack of Transport Capacity Number of scheduled sailings have been insufficient to service both the general economic needs of the island (including the all-important tourist sector), as well as the needs of increased capacity to meet the welcome expansion of Scotch Whisky production. For the 2007/08 schedules last- minute meetings had to be scheduled with Cal-Mac (at our industry’s request) to try to negotiate the extra sailings necessary and some improvements were made. We have already seen problems with adequate capacity to meet the demands of summer traffic, and with the advent of “Homecoming Scotland” in 2009, and the Islay Whisky Festival (in May 2009), based upon current plans, we can easily envisage “pinch points” where capacity is insufficient to meet demand. The two vessels currently servicing Islay have limited capacity. It therefore seems logical that with limited space on a vessel, the only alternative to meeting demand is to increase the number of sailings. The economic well-being & growth of Islay is contingent upon the level of service offered by the ferries. We question if the criterion for business success of the ferry service, being underpinned by a “cost-cutting” or “cost-saving” strategy, is counterproductive to supporting Islay’s growth? Island Facilities The island has three piers handling the ferry vessels: Kennacraig (operated by Cal-Mac) Port Askaig (operated by the council) Port Ellen (operated by Cal-Mac). It is felt that the piers at Kennacraig & Port Ellen are no longer “fit for purpose”. We understand that it is planned to replace them. However, as yet we have received no firm indications of the plans to upgrade facilities. Secondly, all-important oil supplies for the island are off-loaded via the pier at Loch Indaal. We have suffered disruption and uncertainty of supply both from the “just-in-time” strategy of supply implemented by the oil companies, and the problems of vessel access to the facility which was recently revealed to be created by rocks causing underwater obstructions. Oil is vital to the operation of our business – we have come as close to only having 10 hours supply left, after which we would have been forced to shut down operations. Planning for the Future We understand that Cal-Mac are planning to introduce a new vessel in 2010; however, rather then taking this as an opportunity to have a radical re-think as to type of vessel (faster? larger – one ferry to replace the current two?) we will broadly speaking have a newer version of what we have today. An opportunity missed? We have already mentioned the planned replacement of the piers at Kennacraig & Port Ellen. We are told that the new facilities will be built in the same location, and question if there has been any analysis of whether there could be more optimum sites offering reduction in crossing times and improved efficiency? Lastly, the Scotch Whisky distilleries on the island are both within & without tourism, one of the island’s key economic assets. Exporting finished product to the mainland, by casks & tanker for bottling, is an important part of the process. With the increasing pressures to reduce road miles and the carbon footprint of business, we question whether a sailing direct to Glasgow for our cask and tankers would be beneficial in helping to achieve this aim? As one of Scotland’s iconic products, and an important contributor to the Scottish economy, the apparent lack of foresight in planning ferry services to and from Islay, and the problems experienced with capacity are a severe impediment in meeting the economic exigencies of the production of Scotch Whisky on Islay. We acknowledge that dialogue with the ferry operator has improved, but believe that by a willingness to acknowledge us as legitimate stakeholders, and consult business at an early stage in the planning process, this could be substantially transformed to our mutual benefit. Yours faithfully, John Walter Director of Corporate Affairs, International Beam Global Spirits & Wine .
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