UK Investigation Probes the Future of Ailing Scotch Whisky Industry

(Photo: Igor Golovniov / SOPA Images/Sipa USA)

The Scottish Affairs Committee has launched an inquiry examining the impact of tariffs, energy prices and domestic policy on Scotch whisky, exports of which fell by nearly $1 billion between 2022 and 2023.

The investigation hopes to find a new path forward for one of the UK’s most culturally important spirits. The government says that Scotch supports over 41,000 jobs across Scotland and contributes billions to the local economy. But over 90% of production is sold abroad to markets like the US and India, tying the industry’s success to fluctuating trade tensions and rising inflation.

According to the Scotch Whisky Association, exports fell to £5.36 billion (~USD $7.2 billion) in 2025, down from a peak of £6.2 billion (~USD $8.3 billion) in 2022. Further declines are predicted on the horizon, and the government wants to know what it can do to prevent the slide.

“Scotch whisky is an iconic product and one of the UK’s flagship exports, supporting thousands of jobs and making a significant contribution to Scotland’s economy, particularly in rural communities,” Patricia Ferguson, Chair of the Scottish Affairs Committee, said in an official statement. “However, the industry is operating in an increasingly challenging environment, facing trade uncertainty as well as rising costs and regulatory pressure at home.”

“Our inquiry will examine the opportunities and challenges facing the Scotch whisky sector, and how the UK government can ensure it benefits from tariff reliefs and wider trade policy. We’ll also look at domestic pressures, such as the introduction of the Deposit Return Scheme, workforce challenges and rising energy costs. I encourage anyone with expertise in this area to submit evidence to our inquiry and inform our work.”

The Scottish Affairs Committee has opened an online portal where users are invited to submit evidence until September 18. The inquiry has narrowed its focus down to a handful of guiding prompts, including the potential impact of the UK-India Free Trade Agreement, the Trump Administration’s tariffs and energy price pressures from the Iran war. Looking inward, the government questions whether it’s doing enough to market Scotch internationally, and asks what workforce challenges may be affecting future employment, investment and growth.

Tariffs — always the talk of the day in the alcohol industry — have posed significant challenges for Scotch over the past few years, though the market recently scored a handful of wins that may change its fortunes.

In May, President Donald Trump removed the United States’ 10% tariff on Scotch whisky imports, reopening what is widely considered the most valuable export market for the spirit. India, the spirit’s second most valuable export market, implemented its long-awaited free trade agreement with the UK last week, setting the stage for a gradual tariff rollback that whisky insiders have described as a “significant opportunity.”

Other issues are unlikely to find a quick fix. As global alcohol consumption has dwindled, many have speculated that the market is entering a “depremiumization” era in which drinkers are seeking out cheaper, more widely available options. Scotch, long associated with decades-old whiskies and prestigious brand names, has much to lose if that shift turns out to be true.