Closing of Distilleries Over the Centuries

200 years ago, thousands of farm distilleries were operating in Scotland. Today, only about 100 are still there. We describe the history of these shutdowns and the affected.

To get to the bottom of this matter, we have to look closer at the history of Scotland, which is tightly connected to the British. About 300 years ago, there were over thousands of distilleries, which were quite small and well hidden in the Highlands.

A reason for the great mass of distilleries was the short durability of grain. To make it durable, it was distilled to alcohol. Additionally, this extra production step was profitable. More money was earned with Whisky, than with the grain alone.

Even the family of George Washington discovered the distillation of Whisky as a lucrative source of income in the USA. Starting with distilling Whisky, he later established taxes for it. Clever! Because he needed money after the American War of Independence.

Since 1820 taxes were also applied on Whisky in Scotland and distillery licenses were officially sold. This resulted in co-existing of licensed and non-licensed distilleries. The non-licensed retreated to the Highlands. In each distillery, the taxes and the casks were supervised. This job was paid well and even Robert Burns, the great Scottish national poet, was a tax collector on the side to earn money.

On one side the number of distilleries decreased but on the other, the licensed distilleries experienced an upswing, since there was a guaranteed market.

But some distilleries already operated officially before taxes were established. This can be seen by the official founding date. Among others, Bowmore, Littlemill, Glen Garioch and Highland Park are some of those so-called farm distilleries, which were already on the uprise before taxes and licenses.

Over the 19th century, a big problem approached the British state: alcohol addiction! The Whisky sales were through the roof. The average British worker consumed 160 bottles of Whisky each year. Through the high alcohol abuse, prohibition was almost enforced in Scotland and Ireland. But fortunately, it did not happen, and Scotland really took profits as a supplier during the prohibition in the USA.

Distilleries During the Wars

The first World War led to a crash in sales and all other resources were needed for other causes. Different, cheaper alcohol was produced. In times of war, only a small amount of Whisky was produced. Therefore, Whiskies from those times are always wanted by collectors.

Just in time for World War II, the prohibition in the USA was abolished. The Kennedys – originally from Ireland – wanted to establish Irish Whiskey. But the Irish did not act on that opportunity, which had great consequences worldwide! The Scots and their Scottish Whisky were ready and were able to provide in America’s harbours in 1933.

Meanwhile, the Irish had to close most of their distilleries after the war. In the end, there were only two distilleries left: the Bushmills distillery in the North and the Midleton in the South.

Additionally, a great wave of modernization and consolidation swept through the distilleries. Then Great Britain experienced an economic upswing which the Scottish distilleries profited from. Most distilleries in Scotland – unlike Ireland – survived the war and were still operating. On quite the contrary: The sales went up

But then the turning point came in 1979 to 1982: The great British recess, which had a dramatic impact on the whole economy. Wages were paid weekly and in cash and the daily necessities like clothes were paid in instalments. Unemployment was high and times were difficult, with no exception for the Whisky industry. This was the downfall for many Whisky distilleries. To name a few examples: 1981 to 1985 Glen Elgin, Glen Mhor, St. Magdalen, Springbank, Ardbeg, Port Ellen and even Glenfiddich had to close. Others reduced their mass of production. This continued until 1988. Then distilleries like Springbank and Ardbeg got a foot down again. But many distilleries gave up their own malting since it is the most expensive step of the production and great money could be saved by using an external malt supplier. The Whisky business went on slowly until 1991/92 when it went up again. The first boom began in 1995. The founding year of our company – back then it was called ‘The Whisky Store’ - was in 1993. It appeared that Whiskies from the Highlands were more sought after, so the last remaining distilleries in the Lowlands (like Rosebank and Littlemill) had to close. But also, Bruichladdich on Islay and Glendronach in the Highlands were affected.

Warehouses of the Old Port Ellen Distillery
Warehouses of the Old Port Ellen Distillery

Aftereffects of the Distillery Closings

The uprise fastened until 2001. Then the so-called ‘internet bubble’ with profit expectations and speculations on rising stock prices in the tech branch, popped. This led to a shortage of money for Malt Whisky distilleries again. This up and down can still be seen centuries later, since the Whisky has to reach its maturation age. For example, Lagavulin with its typical 16 years of maturation was hardly available in 2000.

Today, after 25 to 30 years, old Whisky is quite rare. And Whiskies which were bottled before 1980 have astronomically high prices. Only privately owned distilleries like Glenfarclas can still provide old bottlings. Enough capital is apparently there.

During the closings of distilleries – no matter the reason – a lot of distilleries were repurposed. The building of St. Madgalen became apartments, a supermarket was built on Glen Elgin, Glen Mhor and North Port. In Glen Ugy offices were created and Rosebank partly became a restaurant. Rosebank was revived by Ian Macleods Distillers and newly built, to distil Whisky again after 26 years of closure.

Here are some bottles of closed distilleries:

Port Ellen is highly acclaimed, but Horst Luening does not share this view. We also do not see Loch Dhu as a great Whisky for enjoying. Such bottles are more interesting for collectors due to their increase in value and not really for their taste. But be cautious! When the stock is getting rare, most likely a ‘special bottling’ is released to the market to make a great profit. Examples are Ardbeg and Bowmore. But the reselling of collector bottles is an entirely different matter.

In the end, we have a movie suggestion: ‘The Angel’s Share’ is about an old and last cask, which is supposed to be auctioned.