Scottish whisky market slides into supply glut amid falling sales and US tariffs | Whisky

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 development, in response to the alcohol information 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 every week.The shake-up has compelled a number of the largest producers to freeze or reduce manufacturing. Diageo, the FTSE 100 drinks group behind a lot of whiskies resembling Johnnie Walker, Talisker and Lagavulin, has decreased manufacturing at a few of its malt distilleries to “stability capability in opposition to present demand”.The corporate has scaled again manufacturing at some distilleries from seven days every week to 5, with operations paused at Teaninich Distillery within the Scottish Highlands. It has additionally halted manufacturing at its Roseisle Maltings website in north-east Scotland till at the least June 2026, with future manufacturing below evaluate.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 present have definitive funding plans for the realm.A spokesperson for Diageo stated it remained “assured and dedicated to the long-term development 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 nearly £20m a month in misplaced gross sales, and greater than 1,000 jobs.Total scotch gross sales within the US, the largest marketplace for the drink, fell 6% within the first 9 months of 2025, in response to IWSR. That was an enchancment on a 9% fall in 2024, however effectively under development 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 stated. “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 People who say they devour alcohol was at its lowest in almost 90 years, at 54%.“However the scotch trade could be very inventive – it is going to discover a approach out of it,” Tegner added. “We’re nonetheless forecasting development by the tip of the last decade.”Within the meantime, some producers are investing in further cupboard space 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 stated it is going to shut down manufacturing at its foremost website 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 response to IWSR.