Job cuts, falling sales and growing competition have put pressure on the country’s most famous export
by BILL HEANEY
Scotch whisky is arguably Scotland’s most famous export, a multibillion-pound success story that continues to shape the country’s economy and reputation abroad.
The industry supports some 40,000 jobs in Scotland — more than 1,000 of them in West Dunbartonshire – and sustains communities from the Highlands and Islands to the Central Belt and Borders through a vast supply chain.
However, the weekend’s headlines in newspapers and television are, in typically colourful fashion, asking: Is Scotland’s whisky industry on the rocks?
The whisky industry may be facing “a challenging period”, but even that is pushing those headlines too far.
There’s no doubt that demand for Scotch has been declining in recent years. Habits are changing fast, and the industry is navigating a long-term change in drinking habits.
Consumers are increasingly choosing quality over quantity, and younger generations are drinking less alcohol than their predecessors.
The main reason for the hype in these warnings that more jobs could soon be lost is down to the usual annual threat that, unless the tax on Scotch whisky sold in the UK is reduced in the upcoming Budget on October 28, hundreds of jobs will go. Frankly, that’s just scaremongering and spin doctoring.
Drinks giant Diageo said earlier this week that cuts to its Scottish operation would be essential to safeguard the company’s future. Really?
Angus distillery eyes international market
An indication that the business is sound is that even small whisky companies aren’t sitting around waiting for the predicted crash in the market to happen.
Fake news is what the industry’s friend and benefactor, President Donald Trump, would call it.
An indication of this is that the Ardbike distillery, near Montrose in Angus, is ramping up its operations despite what they’re calling the “challenging economic backdrop”.
Ardbike makes premium spirits from vegetables on its family farm and is eyeing up new opportunities abroad.
“There’s a bit of a downturn in whisky at the moment,” explained John Stirling, chief taster at Arbikie, who has a more realistic take on what’s going on in the business.
He said: “For big companies, that can be a slight fall of 3%, but they’re still making a lot of money. I’ve just been back from Singapore and Hong Kong, which are very much single malt drinkers. We see them as the real emerging markets.
“Even a tiny increase in orders from India or China, in terms of single malt, we probably wouldn’t have enough single malt in Scotland to cope with the demand, so it’s not all doom and gloom.”
John also said Arbikie had observed changing drinking habits in recent years.
He added: “The advantage for a smaller distillery like us is that people tend to be drinking less, but they are drinking potentially better.
“They’re looking at what they’re actually drinking, what ingredients went into it, so that’s beneficial for us, the way we produce it sustainably and all the ingredients we put into it.”
Maltsters also feeling the strain claim
Just a few miles down the road, the Arbroath Maltings plant has undergone a major expansion – including a multi-million-pound investment that overhauled its Clova operation, making it one of the most modern malt production hubs in the UK.
But maltsters across Scotland are also feeling the strain, it is claimed, with one in Pencaitland, East Lothian, closing earlier this year, the publicists add, gilding the lily somewhat.
Producing Scotch whisky is energy-intensive, and the increase in the price of fuel hasn’t helped those growing grains for the spirit or those distilling it.
Maltsters are buying nearly 40% less malting barley now compared with the peak of whisky production in 2022.
Owen Southwood, a member of the Malting Association of Great Britain, said: “We’ve had to try and manage our barley stock levels right away from farm through our process because we’re always working two years ahead of when the malt is demanded.
“I think as we go forward we will use a lot of the surplus barley in the next 12 months, but it will be a slow incremental increase rather than any major return to normality.”
Lifting of US tariffs a welcome reprieve
There was some good news for the sector earlier this year when the United States lifted tariffs on Scotch whisky. That is putting matters mildly.
Scotland exports more whisky to the US than to any other country, with the Scotch Whisky Association (SWA) saying the tariffs had cost the industry about £150m, with the US market worth about £933m in 2025.
The US had originally imposed a 10% levy on Scotch whisky in April 2025, which had been due to increase earlier this year to 25% for single malts.
US President Donald Trump’s previous 25% Scotch tariff between 2019 and 2021 resulted in the sector losing more than £600m, or £1m a day, the SWA said.
What does the whisky industry want to see in the Budget?
The whisky industry says an increase in tax applied to bottles destined for the UK hasn’t helped their economic fortunes.
Mark Kent from the SWA told STV News: “70% of what you pay for a bottle is taxed. When you’ve got the tax at that sort of level, it has an impact on the consumer. Obviously, they’ll think twice about buying their favourite tipple.
“It has an impact on the industry; the money that goes in taxes is not money that would have been there for investment and creating jobs. At the moment, what we’re seeing is a very difficult domestic situation in terms of the cost of doing business, and that is leading to pauses in investment and job cuts.”
Westminster sources have said they won’t speculate on the upcoming Budget, but reiterated that job growth is a priority.
A HM Treasury spokesperson said: “The chancellor is fully focused on his priorities, to give families and businesses a bit of breathing space, bring back British jobs, and drive growth in every postcode, underpinned by a commitment to meet the fiscal rules.
“As has always been the case, tax decisions are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”
John from Arbikie says the excise duty on spirits is huge in the UK and makes it harder for the industry to grow.
He told STV News: We’re competing worldwide as well. We’re competing against Japanese whisky, against different spirits, so it’s a big competitive disadvantage.
“I think one of the aspects of single malt, in particular in Scotland and Scotch whisky, is that it’s not just the distillers.
“There’s a whole support: there’s the farmers, there’s the maltsters, there’s the lorry drivers.
“It’s a large industry that brings a lot of money to Scotland and the UK as a whole.
“Therefore, to have such a competitive disadvantage in a changing world economy makes it much harder.”
Top of page: The Chivas Brothers plant at Kilmalid in Dumbarton employs at least 1000 people.