Not Out of the Woods Yet: After Avoiding a Tax Increase, Scotch Whisky Producers Have a New Reason to Worry

An aerial view of the Islay distillery, Laphroaig. (Photo: Laphroaig/Instagram)

On Saturday, The Scottish Sun reported a pending peat ban could spell disaster for scotch whisky distilleries, especially those in Islay.

The region of Islay is known for its heavily peated expressions of scotch, which prove to be a vital component of its identity. Yet, if as a 2022 initiative to ban peat use in its entirety rolls out, that component that gives brands like Ardbeg and Laphroaig their signature smoky flavors may just be lost for good.

“Without peat, the majority could not be produced,” The Scotch Whisky Association said in a statement. “This would lead to the end of many key brands and numerous jobs.”

The Guardian reported the ban was first instituted by the U.K. Government in 2022 and was set to roll out in 2024. Environmental organizations are in favor of the ban because they claim the use of peat destroys the highly complex ecosystems that exist within the peatlands.

“These precious habitats are vital for nature and for our climate because they store vast amounts of carbon and are home to some of the UK’s most special wildlife,” The Wildlife Trusts said in a statement.

Though The Scottish Sun reports the ban would roll out on a staggered basis, starting with gardeners before moving to commercial facilities, many whisky producers are already on edge.

The Scottish Sun reports that the scotch whisky industry is currently valued at £5.3 billion ($6.7 billion.)

Yet if the peat ban passes, the financial repercussions could be serious. Though many Scotch producers are looking for a comparable substitute to peat with a less severe effect on the environment, many fear they will not be able to find it in time before the ban is rigorously enforced on a commercial level.

After a nail-biting summer where scotch whisky producers narrowly evaded a 10.1% duty increase, it appears a peat ban is the next obstacle.

Yet, the Scottish Government emphatically expressed that it is doing its part to work with these distillers in an industry with an uncertain future.

“Ministers are committed to a ban on the sale of horticultural peat that is ambitious, realistic and tailored to Scotland’s specific needs,” a spokesperson from the Scottish Government told The Sun.

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