Diageo is postponing plans to expand production capacity in Scotland citing reducing demand for spirits.
According to the company, the slump in demand for spirits is due to economic slowdown across the globe.
Earlier in 2012, Diageo announced plans to invest more than $1.6bn to expand production in Scotland over a period of five years.
The company planned to expand production capacity in order to cater to the increasing consumer demand.
However, the demand is now lowered due to several factors such as crackdown on extravagant spending by the Chinese government, recession in Brazil and currency devaluations in several countries.
Diageo spokesman said: "The weaker global economic environment has impacted the growth of Scotch in certain markets and therefore Diageo will continue to review and adjust the timing of the next phase of our investment programme to manage our Scotch whisky inventory and to retain the alignment between growth in production volumes and growth in demand."
The previously announced expansion plans included construction of a new malt distillery and expansion of an existing distillery in Teaninich, in the Scottish Highlands, as well as other projects in Speyside and Sutherland.
Image: Earlier in 2012, Diageo announced plans to invest more than $1.6bn to expand production in Scotland over a period of five years. Photo: courtesy of David Hawgood.
