Challenges and Adjustments in the Scotch Whisky Industry Amid Tariffs and Demand Shifts
The Scotch whisky industry is facing significant challenges due to persistent US tariffs and fluctuating global demand. Currently, US tariffs on Scotch whisky remain at 10%, with the potential for an additional 25% charge on single malts next spring if no trade deal is reached, impacting the sector's largest export market.
In India, there is hope for long-term relief as tariffs are slated to reduce from 150% to a staged 40%. However, slow ratification means this change will not have an immediate impact, despite India becoming the top importer of Scotch by volume last year. Meanwhile, shipments to China fell by 31% last year, dropping the country from the fifth to the tenth biggest market. In the first half of 2025, Scotch's value in China rose 1% to £2.5 billion despite a 4% volume decline.
Distilleries are responding by adjusting production. Roseisle maltings have paused operations until at least June, Teaninich has ceased distilling, Glenmorangie halted production for several months with plans to resume in spring 2026, and both Benriach and Glenglassaugh have faced reductions or closures. Barley demand for malted barley is forecast to decline from approximately 0.9–1.0 million tonnes to 0.6–0.7 million tonnes. Correspondingly, barley spot prices dropped to £160 per tonne from a break-even level above £200. For instance, an Aberdeenshire co-operative halved its 70,000 tonne barley contract with Chivas Brothers, and closure plans at a Pencaitland malting plant will result in around 20 job losses, reflecting broader shifts in industry capacity.
US-owned firms like Brown-Forman have slowed production at Scottish sites including Glenglassaugh, Benriach, and Glendronach amid demand adjustments. Notably, used bourbon barrels remain a significant ongoing export market for Scotch whisky, valued at about £200 million annually.
According to the Scotch Whisky Association, the 10% US tariffs combined with falling global demand are major challenges alongside UK duty increases that add pressure on margins and investment. The association continues to call for stable barley contracts and enhanced supply-chain resilience from grain production through to glass bottling.
Industry responses include downward revisions of malt demand projections and delays in investment due to planning and capital constraints. Despite closures and cutbacks, efforts focus on maintaining visitor centres and ensuring broader supply-chain stability during these turbulent times.
