Scottish Whisky Producers Scale Back Amid Falling Sales and US Tariffs
Diageo has reduced production at its Scottish malt distilleries, cutting operations from seven days a week to five. The Teaninich distillery has paused production, and Roseisle Maltings will remain halted until at least June 2026, with its future production under review.
Global scotch sales fell by 3% in the first half of 2025, marking the third consecutive year of decline. This drop is attributed to tariff uncertainties and weaker demand, especially from the United States, the largest market for scotch. US tariffs on UK scotch imports remain at 10%, which the Scotch Whisky Association estimates cost the sector around £4 million each week.
In the US market, scotch sales have declined 6% during the first nine months of 2025, following a 9% drop in 2024. In response, some producers are expanding their storage capacities to hold unsold stock. International Beverage, for example, invested £7 million in six new warehouses, increasing capacity by 60,000 casks.
There is uncertainty surrounding Diageo's plan to redevelop the Talisker distillery on the Isle of Skye, as the full planning application still awaits permission and no definitive investment plans have been made.
Meanwhile, Jim Beam will shut down production at its Kentucky site for the entirety of 2026 as part of broader production cutbacks in the US.
Despite these challenges in the scotch sector, the broader whisky market showed resilience, with volumes up 3% in the first half of 2025.
