The City View: More Spring Statement analysis, and The Macallan’s Master Whisky Maker distills her craft

Andy Silvester 0:08 Good afternoon again for me Andy Silvester editor here at City AM. On The City View podcast in a minute, I’ll be joined by Jack Barnett, our Economics and Markets correspondent as we have a pour over yesterday’s spring statement. And then by Kirsteen Campbell, The Macallan’s Master Whiskey Maker, who hopefully will tell us how we too can become Master Whiskey Makers rather than journalists, analysts and traders. Alas, before we move into the world of whiskey, it’s the corporate headlines and it’s another miserable day for P&O, dominating the discussion in a square mile today. The once iconic British brand synonymous with democratising travel across the channel has somehow found itself in even more trouble. After the firm’s CEO admitted to a parliamentary committee that yes, his firm did indeed break the law in the way it dealt with 800 redundancies last week. The boss effectively said that without the move to rid itself of legacy staff, P&O was unviable, but no union would have accepted the package of measures required to keep the thing afloat, and that they are indeed paying new agency workers below the UK minimum wage, rather instead going for international maritime minimum wage. It was not clear what the PR strategy was from P and o today, going into this meeting. But whatever it was, it didn’t work. I think it’s fair to say it will only stick further public anger and strengthen calls for government prosecute, if it can. Elsewhere. It results from next as never good and positive. But the firm did warn it will be booking a substantial hit from rising costs and inflation as those pressures continue to bedevil the retail sector. Next, still somehow finding the secret sauce to keep the High Street business going very well indeed. And a blend was online continuing to pay off elsewhere positive results for Eve mattresses but worse news down the road and McColls’s the convenience store operators CEO stepping down with rescue talks on going probably more corporate news on cityam.com — But we’ve got plenty to talk about about the path of the future economy. And I’ll bring Jack Barnett are economics and markets correspondent in here. Now, Jack, you attended two briefings this morning, one for the resolution foundation and one from the Institute of Fiscal Studies. The thing with budgets and spring statements is that they can often unravel quite quickly over 24 hours. Yesterday started to unravel. Yesterday afternoon when it became apparent that this sort of tax cutting Chancellor will still going to have us as a tax burden higher since Clement Attlee was in Downing Street. And like it’s fair to say more criticism piled on today. Jack Barnett 2:33 Yeah, so we kind of had a record time of people were actually starting to realise what the effects of the Chancellor’s announcement were yesterday, it’s normally takes about 24 hours, you were saying that we normally get calculations from the industry official studies or the resolution foundation, you kind of go into the weeds of this sort of stuff, and then give us the top lines. I think most people kind of got there immediately. Yes, they realise some of the damning forecasts put out by the OPR. So yeah, this this morning, we had some we had the post statement, analysis from the ifs and the resolution foundation. I think the top line there is that so Paul Johnson, who is the chief of the ifs, and normally quite a good quality of person, when it comes to this sort of stuff is um, he’s calling Rishi Sunak, a fiscal illusionist, which essentially, you know, the reasons why kind of given him that label was that yesterday, he said that he announced the biggest tax cutting measures or any fiscal event for 25 years or the IFS Do you think that’s true? They think it was the biggest tax cutting statement or fiscal events is the autumn of 1995. However, all the measures they announced yesterday, so that was the penny off of the pound income tax, the the high National Insurance threshold, so we’re going to be offset by previous announcement. So we’re going to be offset by the 1.25 percentage point White National Insurance. Don’t forget that quite punchy corporation tax hike as well when dividends outside just more and more being piled on. So, you know, yesterday, see that was at pains to kind of Bradish himself as this so called tax cutting Chancellor you want us to be now the wanks don’t think he is and you know, they also think that the the tax burden is still going to be the highest since 1940s. Andy Silvester 4:20 Yeah, it’s an extraordinary set of the numbers that you look at, it’s so easy to get slightly lost in the last in this whole flood of numbers that come at you but we are talking historic figures, this isn’t fiddling around the edges. This isn’t you know, a little bit higher than it was last year or a little bit higher or lower than it was five years ago. These are decades long records that are being broken. We have had an extraordinary time of it. Of course, you know, we weren’t really out of the foothills of the global financial crisis in terms of growth when the pandemic kit and then a war in Ukraine and all the issues with the supply chain that that has created. For me the most troubling to Two really troubling elements of the numbers yesterday in some of the analysis today. Yes, it might feel his growth forecasts, frankly, black of growth forecasts, which we talked at length about today. But this ifs briefing on on average real pay, pretends to be quite difficult time for the chancellor going forward and for the UK economy going forward, because it more or less, and you can explain it. But it basically looks to me like 20 years of loss growth. Jack Barnett 5:28 Yeah, pretty much. So we had, there was a really quite damning chart in the IFS briefing this morning, which basically tracks average real earnings growth for the best part of 50 years or so. And you can see, the trend growth that we had, prior to the financial crisis was kind of, you know, it was on a really, really good trajectory, I think around about the time now, most people would have probably reached about 40,000 pounds in terms of in terms of their incomes. Now, since the financial crisis, the average house or the UK is forgone 11,000 pounds in in real income growth. Now, what that translates to in terms of the wider macro, macroeconomic picture is that, you know, people are just worse off than they would have been had we not had the crisis of as a night and had we not had success of crisis from COVID. And looking like another one now from the war, that it just leaves people more squeezed, it leaves people with less room to be able to spend at least a little less room to be able to, you know, do the things which generate economic growth. And we’ve already had that you mentioned there, we’ve already had these forecasts out from the OPR, saying the growth is going to be markedly worse than what we thought was gonna be in October. And if people were facing this enormous living standards shock over the course of the next year, that really quite damaging real wage growth that we’ve had over the last 1011 12 years or so. Doesn’t look like it’s gonna get any better. I think there was a, there was a chart and the resolution foundation briefing which which said that over the course of this Parliament, so 2019 2024 is going to have the worst rate of living standards shock over the course of at Parliament since 1950. So I think there was a very famous quote from from Ronald Reagan when he was running in the 1980s. asking people whether or not they thought they were better off over the course of this government. I imagine there might be some some people using the similar sort of tactic in the REITs, 2024. Andy Silvester 7:30 Yeah, probably getting a punchy answer, of course, I mean, the other thing to remember, of course, within that is that loss, average pay is basically not average, real earnings are essentially flat. The housing market over those past 20 years has gone gangbusters. So you’ve got this real split in the economy between sort of the asset ID and the and the non asset ID. And that feels like it will become a political touchstone, as well, Jack, we’ll leave it there for now. Thanks so much for joining us. Jack Barnett 8:01 Thank you very much. Andy Silvester 8:02 I think we all need a drink after that. So let’s bring in Kirsteen Campbell. She’s the Master Whiskey Maker at the Scottish distiller The Macallan. It’s fair to say that The Macallan has really ridden the wave of whiskies past couple of decades a real rise again to prominence with some really interesting brands, interesting expressions, as they are called interesting liquids as they’re known in the trade. They’re really just somebody whiskey. So Kirsteen, thank you for joining us. Kirsteen Campbell 8:28 Thank you very much, Andy, I’m pleased to join you today. Unknown Speaker 8:33 Amazing job title. What does that look like on a daily basis, all of us that are stuck in the office all day, staring at spreadsheets and trading patterns in market reports. Your sound far more interesting on a daily basis. Kirsteen Campbell 8:47 Yeah, I guess it does seem pretty exciting, doesn’t it? Actually, I love the fact that, you know, there isn’t such a thing as a typical day for me, for Oliver, but my role is as very diverse. You know, and that can be you know, whether I’m based at the McAllen state where I am today, or based our head office in Glasgow. I love being up here with the team. I lead the whiskey mastery team. So that’s a team of whiskey makers. And it’s our responsibility really to make sure that the quality of Macallan is exceptional and every one of our whiskies. Andy Silvester 9:28 Yeah, well, I mean, I think most people that try it will probably remember that how important is it to you because obviously, Macallan is such a it’s a heritage brand, in a sense of you know, having this instructional history always been known for the quality of the liquid inside those bottles, but it’s also a brand that over the past, however many years is always seemingly from the outside at least tried to innovate as well and tried to do interesting things, how difficult how easy, how rewarding is it to have that kind of heritage brand and all that history but also be trying to do some new and exciting things in the whiskey industry. Kirsteen Campbell 10:05 You’re absolutely right, you know, as a careful balance between history and heritage, you know, becoming up soon to our 200 year anniversary. So there’s there’s that, that we’ve, we’ve got to maintain, of course, but then we’ve also also got to be forward thinking. So yeah, like I say, for me, it’s having that careful balance between, you know, maintaining the quality, the consistency, the heritage, all all the things that Macallan has become renowned for over the years. But also at the same time, looking ahead to how we can do things a little bit differently as well. Andy Silvester 10:44 And talk about maintaining the quality because obviously, in my head, that sounds like an awful lot of tastings. But I imagine there’s probably a bit more to it than that. Kirsteen Campbell 10:52 There is and, you know, I use this terminology on a daily basis nosing and just expect to know what that is. But basically, we spend hours in the sample room, we get samples from all of our tasks, and we know them so we assess the whiskey by smelling basically. And you know, it’s amazing what you can pick up from the smell of a whiskey without having to taste it even. That’s not to say that we don’t taste as well. But you know, we can be looking at we are looking at 1000s of samples every single week, so you can possibly taste taste or those the your nose is very sensitive to aromas or art are certainly because that’s what our skill set lies. That’s what we’re trained on. So the majority of what we do as nosing but you know, we’re creating new products are doing final pretzels on whiskies that are going to bottle them, we do test them as well. Andy Silvester 11:56 We’ll talk about one of the one of the really special whiskies that came to market recently the reach just in a second, but I’m wondering about the it’s all about the skill set around the nose and the aromas. How much of that is his training? How much of it was a gift was, you know, the first time you’re given a whiskey? Did you immediately pick up vanilla and? And cherry notes? Or is that? Is it a learned thing? Presumably it’s it’s the latter. Kirsteen Campbell 12:19 It is, yeah, there’s a huge amount of what we would see on the job training. You certainly have to have a natural ability and be able to smell aroma. He can’t teach that. But what you can teach is the articulation of those aromas, the skill and knowing what combinations of aromas and flavours work well together and things like that. And that can take years and years of training. I began as a trainee blender back in 2007. So, so my training has been since since that moment spending time, you know, with my predecessors in the sample room and learning from them. Andy Silvester 13:08 Yeah, it’s fascinating stuff as a skill as well. And clearly the the quality of it is tasted in every bottle, one bottle, I regrettably will not have the option to taste because it remained slightly out of the price range of a print, print newspaper editor last is is the reach tell us about the reach. Kirsteen Campbell 13:28 The Reach is truly an amazing whiskey and I feel absolutely honoured and privileged to have worked on that. And it’s an 81 year old MacAllan from a sherry cask that was filled in 1940. So a over eight decades maturing away and yeah, my myself and the team, the sensory assessment and decided that now was the time to release that as our as our whiskey. So yeah, incredible. It’s the oldest whiskey that we have released. It’s the oldest Scotch whiskey ever to be released. So to have been involved in the project to I don’t want to hear Andy but to have tasted that whiskey is just quite amazing. Andy Silvester 14:19 Yeah, that is. That’s definitely one to be proud of. But it wasn’t just, I mean, obviously the liquid was amazing, but the Macallan as I guess this speaks to the wider brand and the innovation at the heart of Macallan. There was also an awful lot done with the bottle right? This was not just your often in your average bottle, right? Kirsteen Campbell 14:37 Absolutely not. We worked with a range of Scottish artisans on how to how to present this amazing whiskey and, you know, we worked with a sculptor Saskia Robinson, who you know created the the three hands that create dose the the amazing bottle and that is also presented within a beautiful wooden cabinet. So it really is the work of many hands and you know true of true craftsmanship. Andy Silvester 15:17 81 years of of craftsmanship in the liquid as we as we approach the weekend the sun is is out at least down here. Give us your your pick for a nice summer whiskey, the first son of the year for the weekend. Well, Kirsteen Campbell 15:33 hopefully that reaches Scotland as well. We’ll look forward to for me on a summer’s afternoon I would see one of our double cask MacAllan solar or double cask range. With a combination of our American oak sherry casks and European oak Sherry Castle you get lovely, vibrant citrus flavours coming through from the American cast. So nice vanilla notes. But competent, complimented with that in the background. There’s a lovely sweet spice or things like cinnamon and nutmeg. So I would say double cast 15 Perhaps topped up with some ginger ale would be a lovely refreshing summers. Summer think? Andy Silvester 16:21 Well, I’m certainly sold. Thanks so much for joining us. We’ll go back to crafting that magical liquid. And we’ll speak to you again soon, I hope. Kirsteen Campbell 16:29 Thank you very much, Andy. It was great to talk to you. Andy Silvester 16:32 And that was Kirsteen Campbell, Macallan’s Master Whiskey Maker, before that was it was Jack Barnett. That’s all from me, today and for the week. Tomorrow, you’ll be joined by familiar voices on our tech podcast, our once a week tech podcast, but from me, have a wonderful weekend. Try and enjoy the sunshine and I’ll see you next week.