Whisky Business, City AM’s whisky supplement. The Scotch whisky sector and indeed the wider spirits market have faced a challenging six months, marked by a wave of negative headlines that have painted a bleak picture of the industry’s health. At the beginning of the year, data from restructuring firm BTG warned
Rupert Hargreaves
Wednesday 22 July 2026 11:00 am
Whisky Business, City AM’s whisky supplement.
The Scotch whisky sector and indeed the wider spirits market have faced a challenging six months, marked by a wave of negative headlines that have painted a bleak picture of the industry’s health.
At the beginning of the year, data from restructuring firm BTG warned nearly one in five of all of Scotland’s distilleries were facing financial distress, a total of 69 distillers, with a further 217 across England, Wales and Northern Ireland flagged as experiencing significant or critical financial stress in the second half of 2025.
The outlook for the industry took another battering when the Scotch whisky division of drinks giant Pernod Ricard, Chivas Brothers, reported a five per cent decline in sales.
Since then, the bad news has continued unrelentingly. The owner of The Macallan, Highland Park and The Glenrothes, Edrington Group, has reported a 23 per cent decline in pre-tax profit, with sales down 14 per cent.
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A week later, Ian Macleod Distillers reported pre-tax profits down 45.8 per cent as bulk whisky demand declines at a “significant double-digit rate.”
As Scotch whisky sales have declined, brands have dramatically scaled back investments in visitor experiences – and not just in whisky. Diageo said last month it’s closing the Aviation Gin visitor centre in Portland after buying the brand for up to $610m in 2022. The group has also proposed shutting the visitor centre at its Clynelish Distillery in Brora this year.
Elsewhere, English wine producer Nyetimber, which completed its acquisition of The Lakes Distillery for £71m in 2024, has decided to permanently close the distillery’s visitor centre, bistro, and shop in April 2026.
Taken at face value, these developments support the argument that people are drinking less and spending less on alcohol, but the reality is far more nuanced.
Scotch whisky suffers from changing tastes
In its fiscal half-year results presentation, Diageo highlighted research by BGS Kantar on alcohol consumption dynamics between 2024 and 2025. In the key markets of the US, the UK, India, and Mexico, the research found that, on average, households were consuming spirits more frequently.
In the UK, for example, household penetration was up 1.2 percentage points, with frequency of consumption up 16 per cent. However, across all markets, the number of servings per occasion dropped between zero per cent and seven per cent, which might seem notable, but was largely offset by an increase in frequency.
Meanwhile, IWSR forecasts global consumption of spirits will fall by two per cent by 2035, with wine to see a bigger drop (14 per cent), and beer dipping by one per cent
Instead of a general, broad-based decline across all spirits, what seems to be happening is a shift in spending patterns. Premiumisation is out, while Ready-to-Drink (RTD) and flavoured drinks are gaining market share.
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For example, Diageo has seen an increase in spending on Scotch Whisky leader Johnnie Walker, particularly on special editions, and on Guinness. Both of these are particularly fashionable brands at a slightly higher but not overly premium price point. It has also seen an increase in sales of its Crown Royal Canadian Whisky, blackberry flavour, a social media and flavour sensation.
This is supported by data from Edrington, which noted in its results that sales of 25- and 30-year-old Macallans, costing more than £1,000, fell while the cheaper 12-year-old, which can come in at less than £70 a bottle, recorded double-digit percentage growth.
Meanwhile, the Artisanal Spirits Company, owner of the membership-based Scotch Malt Whisky Society, which specialises in unique, single cask bottlings, recently reported that while overall SMWS sales “grew marginally,” bottle sales in the USA were “particularly strong” (up c10 per cent and Australia “was up double digits.” Like the 12-year-old, SMWS’ bottles usually come in at the £70 to £120 price point.
RTDs take share
There’s also a growing demand for RTD cocktails and spirits. This whole category is expected to grow at a compound annual rate of 11.5 per cent by 2035. In the celebrity-backed RTD and wider drinks market, growth is running even faster.
As a recent article in The Spirits Business highlighted, in its 2025 preliminary data findings, IWSR noted there were “clear signs that premiumisation is taking a back seat, as TBA [total beverage alcohol] value fell for the first time since 2020, with spirits especially impacted”.
Pressure was particularly notable in the $50-plus range of spirits. That’s partially price-driven and partially volume-driven.
Diageo’s new CEO, Dave Lewis, has noted, “As economic pressure has found its way into the US category, we see a downtrading to smaller pack sizes.” As a result, producers have turned to miniature bottles and RTD cans that fit this market perfectly.
Bacardi-owned Patrón has also opened a miniature-bottle dispensing vending machine inside London’s 77 nightclub, a sure sign, if ever there were one, that consumers are still seeking high-end spirits, but at lower volumes and price points.
This must also be contrasted with the demand for one-of-a-kind bottles, such as those that went under the hammer in the Distillers One of One auction last year. Experts had been worried about demand, given the general market headwinds, but the 30 unique lots smashed expectations, raising £2.3m against an estimate of £1.4m. It’s only one example, but it does illustrate there are still those collectors out there who’re willing to spend big bucks.
It’s clear the whisky and spirits market is undergoing a period of adjustment and change, but it’s not seeing the broad decline some might claim. Instead, what seems to be happening is de-premiumisation on one hand, where consumers trade down from bottles in the £200+ range, but also trade up to the mid-range bottles.
They’re drinking less, but drinking better and that goes for RTDs as well – consumers are willing to pay more for that single serve.
They’re also paying to drink what they want, not what they’re told to like. That’s bad news for brands that can’t or won’t adapt, but there’s a growing opportunity for those able to adapt and change with the times.
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