Scotch whisky firm, Diageo, to invest £1bn Published duration 6 June 2012

image caption Diageo says that 100 full-time jobs will be created and the investment is expected to generate hundreds more

Drinks giant Diageo has announced it is to invest £1bn in Scotch whisky production over the next five years.

The company said it would build a new distillery in Speyside or the Highlands and would draw up plans for a second if Scotch continues its global growth.

New warehouses to store the Scotch will also be built.

Both the Scottish government and the Scotland Office welcomed the news, saying it underlined the Scotch whisky industry's commercial success.

Further details of the investment will be released over the coming months but the various schemes are expected to create 100 new full-time jobs.

In addition, 250 jobs will be created each year in construction over the five-year period and the investment is expected to generate an additional 500 jobs in the wider economy.

Diageo, which makes the Johnnie Walker, J & B and Bells whisky brands, has 28 malt distilleries and employs more than 4,000 people in Scotland.

Scotch brands

The company has reported that its Scotch brands have grown by 50% over the past five years - with an expected £3bn for this financial year.

Diageo Chief Executive Paul Walsh said: "We expect that success to continue, particularly in the high growth markets around the world, which is why we are announcing this major investment in Scotch whisky production, committing over £1bn in the next five years, to seize that opportunity for global growth.

"This builds on the foundations we have already laid down over recent years through sustained investment in both production assets and in maturing Scotch inventories.

He added: "Scotch whisky is a significant manufacturing export industry in the United Kingdom, driving domestic investment and job creation through our success in exporting to high growth markets around the world."

'Optimistic outlook'

Finance Secretary John Swinney said the announcement was a strong indication of the company's belief in the future of the sector.

He added: "The investment in new distilleries and warehousing capacity is a vivid illustration of the positive and optimistic outlook for demand in the sector.

"The Scottish government recognises the key role of the Scotch whisky industry in our food and drink strategy and we look forward to working constructively with Diageo to take forward their investment plans in Scotland."

Scottish Secretary Michael Moore also welcomed the investment, saying it was a sign of the commercial success of the whisky industry. ‬