Scottish whisky market slides into provide glut amid falling gross sales and US tariffs

[ad_1] The Scottish whisky market has slipped right into a provide glut as US tariffs and falling demand weigh on the nation’s distilleries.

International scotch gross sales fell 3% within the first half of 2025, marking the third consecutive yr of decline after a long time of progress, in line with the alcohol knowledge supplier IWSR.

Distilleries have been grappling with uncertainty round Donald Trump’s commerce tariffs, in addition to declining charges of alcohol consumption.

Whereas Keir Starmer secured a commerce cope with Trump in Might, whisky imports from the UK into the US are nonetheless topic to a ten% tariff. The Scotch Whisky Affiliation (SWA) has estimated that it prices the sector £4m per week.

The shake-up has pressured among the greatest producers to freeze or cut back manufacturing. Diageo, the FTSE 100 drinks group behind quite a few whiskies corresponding to Johnnie Walker, Talisker and Lagavulin, has lowered manufacturing at a few of its malt distilleries to “stability capability towards present demand”.

The corporate has scaled again manufacturing at some distilleries from seven days per week to 5, with operations paused at Teaninich Distillery within the Scottish Highlands. It has additionally halted manufacturing at its Roseisle Maltings web site in north-east Scotland till a minimum of June 2026, with future manufacturing underneath evaluation.

Diageo’s proposed redevelopment of its Talisker distillery on the Isle of Skye can be unsure. Its full planning software is awaiting permission from the native council, though it's understood the corporate doesn't at the moment have definitive funding plans for the world.

A spokesperson for Diageo mentioned it remained “assured and dedicated to the long-term progress of scotch whisky” however was managing capability after a interval of sustained funding and inventory buildup.

This yr the SWA warned that US tariffs are costing the sector virtually £20m a month in misplaced gross sales, and greater than 1,000 jobs.

Total scotch gross sales within the US, the most important marketplace for the drink, fell 6% within the first 9 months of 2025, in line with IWSR. That was an enchancment on a 9% fall in 2024, however nicely under progress charges in 2020, when gross sales rose by 4%.

Luke Tegner, of IWSR, added {that a} broader decline in alcohol consumption was additionally feeding the droop.

“Scotch has had a increase within the final 35 years,” he mentioned. “However extra lately it has been hit by tariffs, by affordability and by folks moderating how a lot they drink.”

In August, a ballot by Gallup discovered the share of Individuals who say they eat alcohol was at its lowest in practically 90 years, at 54%.

“However the scotch business may be very artistic – it would discover a means out of it,” Tegner added. “We're nonetheless forecasting progress by the top of the last decade.”

Within the meantime, some producers are investing in further space for storing to accommodate unsold inventory. Worldwide Beverage, which owns scotch manufacturers Outdated Pulteney, Speyburn and Balblair, spent £7m this yr on six new warehouses, including capability for 60,000 casks.

Within the US, different distilleries have reduce on manufacturing: the bourbon model Jim Beam, which is owned by the Japanese drinks firm Suntory Group, has mentioned it would shut down manufacturing at its fundamental web site in Kentucky for all of 2026.

Whereas the marketplace for scotch has been weaker this yr, the broader whisky market has been extra resilient, with volumes up 3% within the first half, in line with IWSR.