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Possible future development near Kingsbarns - The Kingsbarns Company of Distillers - Cambo Estate
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Another new distillery - can they work?, 30 June 2009

Off to Kingsbarns yesterday, a pleasant village on the Fife coast near St Andrews, to see the site for the proposed Kingsbarns Distillery and meet the team.

Very interesting.

As you will probably know a few new boutique distilleries have been successfully opened in recent years here in Scotland: Daftmill, Kilchoman and Red River on Lewis spring to mind, as well as St George's in Norfolk ("the whisky capital of England"). "Successfully opened" I say, but it remains to be seen how they'll do in the recession and after the first flush of enthusiasm has passed and others get the novelty vote. But never mind that. So far, they get full marks for even getting to the starting line and making whisky. Lots of respect for that.

For there are many other hopeful schemes yet to see the light of day. At a quick count, I can think of projects in the Lake District, Isle of Man, Shetland, Isle of Skye, Isle of Barra, Harris and near Falkirk and Edinburgh, not to mention Fife's other venture at Ladybank. Now, to avoid getting sued, I'm not going to say very much about these other to observe that some of them have been around for a long while; in some cases, money has been raised from "investors" and yet there isn't much to see. You don't have to be too cynical to raise a sceptical eyebrow at some of these schemes.

After all, as Andrew Nelstrop of St George's told the World Whiskies Conference, "Flogging casks before you build the distillery should be a crime!" An extreme point of view certainly, but you can see his point.

So what about this new venture, "The Kingsbarns Company of Distillers"?

Well, on the positive side, they've got a great location near St Andrews with plenty of affluent tourists to draw into their visitor centre. The buildings they propose to use are rather attractive (well, not at the moment, but they could be) and they've got an enthusiastic team, with a great architect.

And they've got Bill Lark from Tasmania advising them and his track record is second to none in this start-up game.

But they face some pretty severe obstacles. Apart from the ten or so projects ahead of them in the race to be the next artisanal craft distillery (how many can the market take, one wonders?), they have next to no money, the buildings are derelict, they've only got a 40 year lease and, apart from Bill, there isn't a lot of experience in the team (no shortage of enthusiasm though). And, while the business model has worked elsewhere, there doesn't appear to be a fully developed business plan.

The current offer to "investors" (their word, not mine) is an attempt to raise £100,000 for a 45.5% share of the company, in £4,000+ bites. So, for £4,000, you'd get 1.82% of the company, valuing this start-up at just under £220k. The Directors keep 55.5% for, so far as I can see, their 'sweat equity'. No-one has their house on the line.

What's the £100k for? Well, basically to do a feasibility study and secure the lease. You might think that they should have done both those things already but, despite this, it's suggested that "Shareholders may receive a very high return in a very short period of time..." (again, their words, not mine).

Alternatively, you can pre-order a 'Foundation Barrel' of new make at £1,200 for a 100 litre cask which, the paperwork suggests, will be produced by June 30th 2011.

That feels just a trifle optimistic.

Caveat emptor, I'd say!

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