Scottish Whisky Market Scales Back Production Amid Falling Sales and US Tariffs
Global Scotch whisky sales fell by 3% in the first half of 2025, marking the third consecutive year of decline. The IWSR attributed this downturn to persistent US tariffs and weaker consumption. The US continues to impose a 10% tariff on UK Scotch imports, which the Scotch Whisky Association (SWA) estimates costs the sector about £4 million per week. US sales dropped 6% in the first nine months of 2025 following a 9% decline in 2024.
In response to the reduced demand, Diageo has scaled back production at several malt distilleries. Operations at Teaninich have been paused, and production at Roseisle Maltings has been halted until at least June 2026, with future production plans under review. Additionally, investment in Diageo's Talisker distillery redevelopment on the Isle of Skye remains uncertain, pending local council approval and with no definitive investment plans currently in place.
The Scotch Whisky Association has highlighted the broader impact of the tariffs, citing losses nearing £20 million per month and the threat of over 1,000 job losses across the sector. Despite these challenges, some producers are adapting by investing in additional storage to manage unsold stock. International Beverage has invested approximately £7 million in six new warehouses, increasing capacity by 60,000 casks.
While Scotch whisky struggles with declining volumes, the broader whisky market has shown resilience, with a 3% increase in volumes during the first half of 2025 according to IWSR. In the US, bourbon producer Jim Beam plans to shut down production at its Kentucky site for the entirety of 2026 as part of sector-wide cutbacks.
