Victoria distillery with 80 new jobs a step closer

A new Victoria distillery that will create 80 new jobs for the region is a step closer to reality with a $2.37-million commitment from the federal government.

The Victoria Caledonian Distillery now has the money needed to find a location and begin production, said Graeme Macaloney, president of Macaloney Brewers and Distillers.

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“This means we have secured sufficient funds to proceed forward aggressively to secure a building where we can establish the distillery,” Macaloney said, adding that the firm, which has already raised millions in private investment, will remain open to investors.

The federal money comes from the Agriculture Ministry’s Agri-Innovation Program, a five-year, $698-million initiative to fund innovation in Canadian agriculture and speed up commercialization of new products.

Macaloney’s distillery will use an innovation in whisky maturation that will produce premium whisky with just three years of aging.

“That’s part of our competitive advantage,” he said, noting the competition has built their premium brands on whiskies aged 12, 18 and 25 years.

Macaloney plans to sell in more than 30 countries, potentially generating millions in export sales, and use B.C.-farmed malt barley.

According to Agriculture Canada, the project could increase demand for Canada-grown malt barley by as much as 500 tonnes a year by 2018.

“Our grain-farming and whisky industries play an important role in creating jobs and driving exports,” said John Duncan, MP for Vancouver Island North.

“Macaloney Distillers is an exciting new player in the Canadian whisky arena, and key investments in innovation like this one will allow them to be competitive with the Scotch, Irish and bourbon whisky exporters, while rapidly establishing and growing exports to a diversified global marketplace.”

But first, Macaloney needs to find a suitable site. “I would say I’m in active discussion at all levels with the [City of Victoria] and other jurisdictions on the Saanich Peninsula,” he said.

Macaloney said he is looking at sites with between 25,000 and 30,000 square feet of space.

The Crystal Garden building in downtown Victoria has been suggested as a possiblity, he said. The City of Victoria is exploring options for leasing the site.

“It’s a beautiful building and we are very much a cultural, historical, traditional type business — albeit with this innovation of rapid maturation,” he said, noting it might be a good fit considering Victoria’s strong ties to British and especially Scottish culture.

Macaloney estimates the distillery could be up and running within a year of finding a site. It would be another three years before the product is ready for sale. Until then, the company intends to establish sales of “guest” whisky — casks bought from another distiller — to establish brand, marketing strategy and distribution networks.

Macaloney said there is plenty of room in the global whisky market, especially for an artisanal distiller.

According to the federal government, the Canadian distillery industry employs more than 1,200 people and generates $1.3 billion in whisky sales.

However, the Scotch Whisky Association, established to protect the integrity of Scotch whisky, reported last month that exports of whisky from Scotland dropped 11 per cent over the first half of 2014 to $3.2 billion compared with the first half of 2013.

aduffy@timescolonist.com

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