Drinks giant extends malting barley contract

Scotland’s largest distilling company, Diageo, has extended its pioneering malting barley contract for another two years.

The deal, which was trialled last year, allows farmers to lock 70% of the malting barley they supply at a set premium, rumoured to be about £20/t, over November wheat futures. The remaining 30% can be traded at open market prices.

Diageo hopes that extending the contract will bring longer-term stability to the barley market and secure supplies for its 28 malt and two grain distilleries in Scotland.

“The pilot we ran last year in response to the concerns of growers and merchants and our needs as a business has been a great success, and we’re delighted to be able to extend it further,” cereals procurement manager Alan Williamson said.

“Our ambition is to create the stable and sustainable way of procuring grain we need in order to assure long-term supply security.”

NFU Scotland’s vice-president, Allan Bowie, welcomed the new deal and said it was an example of what could be achieved through strong supply chain relationships.

“Diageo are making great efforts to bring long-term stability to grain price structures by recognising the volatility in the global cereal market, and acting now to secure barley which gives a fair return to both grower and end user.

“Scottish growers consistently produce a quality barley and that is certainly reflected in Diageo’s product. These partnerships can only bode well for the future of barley growing in Scotland.”