Is The Whisky Industry Good For Scotland?

While enjoying Scotch whisky I've always assumed that it is also good for Scotland, contributing a significant portion to the national economy. But following recent announced plant and distillery closures by Diageo, some are wondering jut how good whisky will continue to be for Scotland. William Lyons writing in the Scotsman has a must-read article for whisky lovers which questions if the whisky industry is heading down a path that will end up with just a few large distilleries and an end to the proliferation of smaller brands with long histories. This type of conglomeration also impacts that farmers, suppliers and others in the chain of production.

The article brings up some key points including the fact that most of the taxes raised by the sales of whisky are costs paid by consumers not the distillers. There is also the concern that while the whisky is pitched as a Scottish product the industry portion of the production such as packaging and bottling is being increasingly handled elsewhere. The article quotes Brian Donaghey, the managing director of Diageo Scotland who has said that Scotch has to be distilled and matured in Scotland but not bottled there. In recent months Scotch whisky which was once booming has started to be affected by the economic downturn but in the long run it is expected to be a growth industry with consumption in Russia, China and India continuing to rise.

Does it matter where the whisky is bottled? After all, you are tasting what is inside. But there are reasons to keep the bulk of a products benefits inside the country that produced them. Part of honoring the great whisky heritage of Scotland, I think, is keeping both the diversity of the many distilleries and making sure that the country as a whole gets enough out of the industry to continue to develop it. Bottling may not be the sexiest part of whisky production but it is part of the process.