If the prevailing narrative is to be believed, it’s a pretty gloomy time for the whisky industry. Published sales figures for major whisky distillers indicate that 2024 was a challenging year commercially, with most reporting flat or slightly reduced sales overall, primarily due to poor performance in the US and China.

 

This trend is reflected in the share prices of industry giants Diageo and Pernod Ricard, as well as that of Brown-Forman, all of which have been steadily declining since the summer of 2023. There is an argument to be made that this is a shareholder overreaction, given the available data, which appears to be wildly disproportionate to the actual commercial reality. Nevertheless, the optics aren't great.

 

Not helping matters, the widely publicised reports of reactionary layoffs by distillers and distributors on both sides of the Atlantic give some indication of the trade’s response to these headwinds, and, true to form, many influencers, journalists, and media outlets have jumped on the situation to farm clicks on stories arguing that the whisky industry is entering a 'bust' period following the boom of the past decade.

 

Claims of a 'crash' and the return of the 'whisky loch' abound, even though the available sales figures from major distillers and overall export figures don't paint a picture that's anywhere near so stark. While it's true that the value of Scotch exports dropped by 3.7% by value in 2024 compared to 2023, volume increased as cash-strapped consumers spooked by global uncertainty traded down to more value-driven products. What's more, overall Scotch export value and volume remain well above pre-pandemic (2019) levels.

 

Similarly, although American whiskey exports dropped by 5.4% in 2024, the overall figures remain well above pre-pandemic levels and are generally on an upward trajectory. Overall, according to Commercial Spirits Intelligence, roughly 35 million more 9-litre cases of Irish, American, and Scotch whisky were sold in 2024 than in 2012 — a healthy growth trajectory by anyone's measure.

 

(If you need help sleeping, you can find the relevant financial and insights disclosures I'm referring to here, here, here, here, and here. SWA figures are here. The Distilled Spirits Council of the United States 2024 report is here. For level-headed, digestible analysis, I highly recommend subscribing to Martin Purvis and Duncan McFadzean's excellent Substack, Commercial Spirits Intelligence.)

 

While it's true that premium bourbon and single malt Scotch whisky are both taking a bit of a knock at the moment, overall figures suggest that the commercial reality isn't actually as dire as some are making it out to be, with Q1 2025 value of exports increasing for Scotch even in the face of small volume declines and increase in the proportion exported as bulk. Overall, the numbers paint a picture of gradual growth for the global whisky industry as a whole during an unprecedented time of international economic and political upheaval.

 

This has only deepened my frustration at seeing the reactionary cost-saving initiatives — that is to say, redundancies, production halts, and divestments — of several of the larger whisky businesses in the past few months, which to me seem not only woefully short-sighted but, in my mind, will actually hinder recovery. Driven by rising costs and declining margins, these cuts have little to do with protecting the industry in the long term and everything to do with maximising short-term gain.

 

Firstly, there’s the loss of expertise: a great deal of time, effort, money, and training was invested into putting the right teams and supporting infrastructure in place in sales, marketing, cask supply, distribution, and production departments during the boom years. 'Consistency' is a whisky industry buzzword for good reason, and the knee-jerk, wholesale firing of knowledgeable, experienced teams with institutional knowledge — the very people who are the foundation of any company's long-term success — to appease shareholders is not how consistency is delivered.

 

This makes it all the more disappointing when we see how quickly some businesses have lost their nerve and cut jobs after profits took a hit in the past 18 months. That those same businesses had seen record profits in the preceding years rubs salt into that particular wound, severing trust in those companies as reliable employers and ultimately sending shareholders, employees, and informed whisky fans a mixed message about their long-term commitment to a sustainable, quality-driven whisky category.

 

Then there's the divestments. Once a champion of integrated supply chain, Brown-Forman's closure of its Louisville cooperage made headlines when it was announced in January, resulting in the loss of more than 200 highly skilled jobs. However, the site has since been acquired by the Missouri-based Independent Stave Company, which also bought Brown-Forman's Alabama cooperage in 2024. We can only hopefully this will lead to job recovery in KY.

 

Another prominent U-turn was Diageo's withdrawal from the 'accelerator' programme Distill Ventures, through which it had acquired brands including Seedlip, Ritual Zero Proof, and Belsazar. Although it's unclear what the exact implications will be for the whisky brands that remain in Distill Ventures' portfolio (Westward, Starward, Stauning, Kanosuke, and Fielden, among others), what I'm hearing is that these distillers have been left in the lurch, leading to confirmed job cuts at Stauning. Diageo's exit also came exactly a month before Westward's filing for Chapter 11 bankruptcy protection.

 

Once they've weathered the initial turbulence of Diageo's exit, I truly hope this will be beneficial for these brands in the long run. Success in the whisky business requires a long-term perspective, and having a fair-weather partner generally proves to be worse than having no partner at all. Ultimately, what made all of these distillers a good investment 2, 4, or 8 years ago remains true today: they're distinctive, innovative distillers making great spirit in unusual ways, and all are very much a product of their local culture — a fact that is resonating with whisky fans at home and abroad. These fledgling brands are not just charting new courses in the ways they make whisky, but also in the way they present and talk about it, too. I hope others with deeper pockets than mine will see this potential too and back them long-term. 

 

Overall, what frustrates me most is that these knee-jerk reactions risk validating the ‘doomers’ heralding a whisky crash and risk creating a self-fulfilling prophecy of negativity that, given enough time, might truly undermine the whisky category’s reputation — a reputation already being tarnished by reports of widespread fraud by so-called whisky cask investment companies, a feeling of unease among consumers around recent price increases, and a general overreaction to the value correction we've seen in the secondary market post-pandemic. I can’t help but think that the industry’s reactionary measures have served to do more harm than good, extracting profit at the expense of the industry's long-term stability, and ultimately allowing hawkish outsiders to control the narrative — spooking would-be investors, collectors, and enthusiasts in the process.

 

This is especially galling when all the evidence points to an industry with immensely strong foundations and a bright future with plenty of room to grow. In spite of an incredibly volatile global economic and political situation, the available half-year FY25 sales results seem to bear out the quieter, more moderate, and widespread view among industry insiders that the whisky business has simply gone through a needed ‘correction’, and is now just about back on track, with evidence of green shoots already emerging in the US in spite of domestic volatility. While the outlook in both the travel-retail sector and China is less than positive, figures suggest that other key markets are up, and the recent election results in South Korea will hopefully see that market rebound as well with the return of domestic stability.

 

Setting financial results aside, my belief that the industry is fundamentally strong also seems to be borne out by what I’m hearing anecdotally from whisky fans and trade around the world. While many might have cut back on purchases in the past year, most say that this was the result of economic factors and political uncertainty rather than a loss of interest in whisky. On the contrary, most data coming in suggests interest in whisky is continuing to grow: Gen-Z is showing a preference for spirits earlier in life when compared to previous generations (when they drink, that is), and the growing middle classes in developing markets like Nigeria are increasingly choosing whisky as their drink of choice.

 

Which brings us to the recent welcome news of a long-awaited free trade agreement between the UK and India that's widely agreed will put some wind back in Scotch whisky’s sails. The agreement, announced on 6 May, will see tariffs on Scotch whisky reduced from the cripplingly high 150 per cent to a somewhat more palatable 75 per cent, lowering to 40 per cent by year 10 of the deal.

 

On track to become the world’s third-largest economy within three years, India is the world’s largest Scotch whisky market by volume, owing to the significant amount of bulk whisky exported there for use in ‘Indian Made Foreign Liquor’ products. However, true Scotch whisky products are also popular, and the premium segment there is growing. It'll likely be another year until we see the true impact of this agreement, but it's a positive development nonetheless.

 

Should the tariff savings be passed on to consumers rather than being replaced by state-level taxes or absorbed as margin, we should see growth for established premium brands, continued strong performance from bulk whisky exports, and an opportunity for new-wave distillers to enter and compete in this increasingly discerning whisky market, too. This should be a net positive for whisky fans worldwide, with the industry’s continued health keeping the doors of our favourite distilleries open and driving the creation of new whiskies to enjoy. 

 

My final word is this: now is not the time for distillers to get cold feet, cut budgets, axe jobs, and halt production. It's been relatively easy to sell whisky this past decade, and now times are a little tougher, it's never been more important for brand owners to double down on all the things that helped us whisky fans fall in love with your drams in the first place: great spirit sold at a fair price, tours and tastings, exciting events, creative promotional campaigns, and educational support for both the on- and off-trade have never been more vital. The old adage says that nothing worth doing is easy, and I'm certain that those distillers who keep a cool head, show respect for their employees, and fairness in their business practices during these turbulent years will be rewarded.

 

An abridged version of this column appeared in Whisky Magazine issue #207.