One in five Scotch distilleries in financial distress
Data from restructuring firm BTG has found that 19% of distilleries in Scotland are facing financial distress.
A business distress report from December 2025 discovered that 69 distilleries in Scotland were facing ‘significant or critical’ financial issues.
This was a 40.8% increase in the final three months of 2025, ahead of the UK average of 12.2%.
Year on year, there was an increase of around 17% of Scotch distilleries in distress, compared with the national average of 6.7%.
A further 217 distilleries in England, Wales and Northern Ireland said they were facing financial difficulties.
“Distilleries in Scotland, where the majority of the UK’s whisky production is based, are facing a perfect storm of lowering demand, rising production costs and increased tariffs in key markets, factors that have already cost numerous brands their businesses over recent months,” said Thomas McKay, managing partner of BTG in Scotland.
“Previously thriving businesses that have existed for generations are facing distress, often through no fault of their own, and there is a case for additional support to the sector to preserve the heritage of the Scottish whisky industry in unprecedented times.
“This is especially clear when you consider that Scottish distilleries directly employ more than 10,000 people, well over half of the industry’s workforce in the UK.”
McKay added that demand for Scotch and other spirits peaked in 2020 during Covid lockdowns, however demand has since fallen away. The remaining oversupply has caused prices to fall.
Another problem for the industry is the cost of exporting to one of Scotch’s biggest markets – the US – due to tariffs.
He said: “The dynamics of these market forces are such that they are impacting otherwise healthy businesses that have used their cash reserves to stay afloat, and now need to restructure to survive this period of drastic downturn.
“We’ve helped a number of distilleries and businesses to do this in recent months, but swift action is needed to help the industry in these very challenging times, especially if the threatened higher tariffs come into effect in the summer.
“Exports to China fell by over 30% last year, and it is still not clear whether US orders in 2025 were artificially high in order to build up stocks there before the new tariffs impact prices. If so, that could see exports of Scotch to the US fall away precipitously, and it’s important for businesses to have a plan if that does happen.”
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