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12th May 2014

Arran wants to buy distillery

The Arran Brewery and partners have submitted a bid to purchase the assets

of the Bladnoch Distillery near Wigtown.  It is thought that there was

considerable interest in the Distillery which is being sold by the
Administrator Ernst & Young  LLP.

The Arran Brewery plc previously had to abandon a bid to purchase the
former site of Rosebank Distillery in Falkirk when Falkirk Council decided
to classify the site as “Abandoned” and Arran Breweries investor partners
consequently withdrew their support for the project.  This was despite
getting the offer of a £500,000 grant from Scottish Heritage and a likely
grant from the lottery commission.

Managing Director Gerald Michaluk said “ We were extremely disappointed at
the Councils decision in Falkirk to classify the site as abandoned even
when their own report showed we passed four of the five tests of whether
or not the site was Abandoned and our legal team made a strong argument
for overturning their only reason for considering the site abandoned.
As a result our partner investors were not willing to take the planning
risk and the final nail in the coffin was, despite assurances of
relaxations in building regulation in consideration of the history of the
building, nothing was ever put in writing thus we could not convince our
investors that we could complete the project on budget without potential
planning and building control restrictions making the project uneconomic.
So when our partners withdrew from the project and not having the
considerable funds required to open a distillery and to promote a new
whisky brand on our own, Scottish Canals cancelled our lease with an
option to purchase the site which was also to house a new brewery and our
central bottling facility.

However, our investor partners are willing to support us in the purchase
of Bladnoch distillery which went into administration earlier this year.
We will know in the next few weeks whether our bid is going to be taken
any further”.

Earlier this year the Arran Brewery sold 0.2% of the company for £160,000
valuing the company on paper at least at £80m, in the first round of a
fund raising exercise aimed at raising £4m. This combined with other
investments saw the company raise £260,000.   Interestingly all the Arran
Brewery’s own staff, eligible to purchase shares, did so showing internal
support for the company’s plan is very strong.

The brewery has recently purchased two sites one in St Fillans (Loch Earn)
This former hotel is being refurbished as the Loch Earn Brewery, Hotel and
Visitor Centre while the other in Dreghorn (North Ayrshire) a former
school is awaiting planning consent to be refurbished as Scotland’s first
Sake brewery, and Research and Development Centre and will house a
bottling facility.

Gerald added  “ We are upgrading the brewery on Arran as well as being
fully funded for phase one of the Loch Earn Development and to enter
international markets”.

The Arran Brewery has appointed Gary Paterson as its UK Sales Manager.
Formerly Gary worked for Carlsberg and the G1 pub group. He will be
responsible for overseeing the company’s plan for a tenfold increase in

Arran Recently launched its brands in London and is seeking distributors
in the rest of the UK and overseas.

While two new Brands are being launched for 2014 including  “The King’s
Cave” named after the Cave on Arran where Bruce is thought to have
encountered the Spider that encouraged him to try once more try to free
Scotland “ and ”Ben Vorlich” a strong barley wine inspired by the mountain
near the new Loch Earn brewery in Perthshire.


Gerald Michaluk
Arran Brew Ltd
100 Wellington St
Glasgow, G2 6DH
Tel: +44 (0)1764 685296