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Is Islay’s whisky boom about to hit a snag?

Publication: The Illeach

Islay’s whisky industry has experienced explosive growth in recent years, with new distilleries rising across the island. But as some distilleries scale back production amid shifting global markets, questions arise: Is the island's golden goose on a break, or are we witnessing the first signs of a brewing storm in Scotland’s whisky capital?

Illustration by Brian Palmer
Illustration by Brian Palmer

Is the golden goose on a break?

The last few years have seen plans for several new distilleries on Islay. With Portintruan already underway, despite construction problems, the re-opening of Port Ellen Distillery in March 2024, continued building of Laggan Bay Distillery at Glenegedale and Chivas Brothers proposals to construct a distillery at Gartbreck on the outskirts of Bowmore, Islay’s reputation has seen comments from both sides of the argument.

Underlying all this have been thinly–veiled remarks from many, that Islay is in danger of placing all its eggs in the whisky basket. What happens if the bubble bursts?

It’s not so very many years ago that Islay’s malt whisky industry was in the doldrums, with Bruichladdich and Ardbeg both mothballed and one or two others working at far less than full capacity. 

The contention that we might return to those days has regularly been countered by the argument that the present-day whisky industry is considerably different than it was in the 1980s. That may well be true, but as several industry analysts have warned previously, it would take only a minor change in drinking habits worldwide, or as happened more recently, the imposition of punitive tariffs, to change the whisky landscape overnight.

Is that possibly what’s happening now?

Bruichladdich Distillery made several redundancies in 2024 and lowered their production targets, as did Bowmore Distillery late last year, now adopting a five-day working week and reputedly reducing its annual production. The Ileach understands that similar changes have been made at Bowmore’s sister distilleries at Auchentoshan and Glen Garioch. 

Bruichladdich will apparently maintain their current production schedule in 2025.

Ardbeg too, planned two redundancies late in 2024 along with a reduction in output.

The reasons for the above could just as easily be a minor blip, as opposed to a perceived downturn in the world whisky market. During the Covid years, many distilleries increased their production to cope with additional demand (off licences were considered to be essential businesses and allowed to remain open during lockdown).

However, as with many industries, most notably the leisure industry, the repeal of lockdown conditions changed matters almost as quickly as the pandemic had imposed them. In many cases, this meant too much product in the sales pipeline, hence the need to cut back until the problem (hopefully) sorts itself out.

Owner of Kilchoman Distillery, Anthony Wills, told the Ileach, “In 2023 and ‘24, we saw a downturn in single malt sales, so it’s not something that just crept up on the industry. Prior to 2023 we had four years of double-digit growth which was similar across the industry.   

“Everyone was producing at full capacity and at Kilchoman we started looking at increasing production again.  However, this has been put on hold until the economies around the world recover.   

“We’re seeing signs of a slight recovery in Europe, but it’s still very tentative, so we predict another challenging year in 2025, but we forecast a slight increase in sales.”  

The Ileach contacted  Suntory Global Spirits, owners of Bowmore and Laphroaig distilleries but they declined to comment.

And it’s not only the whisky industry that’s suffering. Earlier this week, the Guardian newspaper published an article concerning a 10% drop in sales of French champagne, ascribed to “…economic uncertainties, conflicts across the world […] and people under 40 in key markets such as the US, rejecting alcohol altogether.

But what of the new Islay distilleries that haven’t made it to the production stage yet. Is the portent of a decreased market giving cause for concern?

Construction of Portintruan Distillery on the outskirts of Port Ellen hasn’t been all plain sailing so far, with the original contractor ISG, having gone into liquidation last year, and the recent appointment of Morris and Spottiswood to keep things on the straight and narrow.

We asked manager, Georgie Crawford, if current trends had given any cause for concern? She told us, “Our production is modest in comparison to some of our famous neighbours, so no, this has no effect on our plans. We have a production ramp-up already baked in over the first few years, as we still have a brand to grow, which will then dictate the future output.”

Yet slightly farther afield, former joint-owner of Bruichladdich Distillery, Mark Reynier, converted a former Guinness brewery into Waterford Distillery in Southern Ireland in 2015. But in November 2024, the distillery went into liquidation. Cited reasons for its demise, however, have been aimed at Waterford’s niche branding and cashflow problems, rather than to a possible downturn in the whisky market.

However, the majority of recently announced new distilleries on Islay have yet to reach escape velocity, at which point, they’ll have to deal with whatever strength of economic headwind appears over the horizon.

And it’s not simply supply and demand that could conceivably undermine the intended success of these proposed additions to the Islay skyline.

Kilchoman’s Anthony Wills pointed out that, despite any industry misgivings, “There doesn’t appear to be a slow down in the number of new distillery projects in Scotland and particularly on Islay.   

“It will be more of a challenge for them to gain market share in what is already an overcrowded marketplace.  

“The unique issue we have on Islay with new distillery projects, is that the island is struggling to cope servicing the existing distilleries, so why grant new planning permissions for more distilleries until the various issues are addressed? We might be getting new ferries soon, but those aren’t going to resolve the long-term issues.”

Though little has been heard of any progress at the proposed ‘Ili’ Distillery near Kilchiaran, Chivas Brothers, who plan to build a distillery on the site of the former Gartbreck Farmhouse near Bowmore, underlined their committment to continuing with their proposals. They offered no comment, however, on how a possible sales downturn might affect their plans.

Production Director, Brian MacAulay, told us they were currently awaiting a decision on the distillery planning application approval.

He said, “At this time, we continue to work with Argyll & Bute Council, the community, and local representatives, while progressing the distillery’s detail designs. It remains our ambition to create a distillery of which the people of Islay can be proud.”

Experts within the industry have stated that the current downturn, if it can be classified as such, is affecting the whole of the spirits industry, not just single malt. And though one distillery manager told us that, while he could see matters eventually improving, how long that might take was much harder to forecast, particularly following the re-election and unpredictability of Donald Trump as American President.

However, a general consensus appears to be that the recent and impending additions to Islay’s whisky landscape, are unlikely to affect the existing producers. How they themselves eventually fare in a changed market place is yet to be seen.
We’ll maybe check back with the goose later this year.

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