WHISKY IN 2025: HALF-YEAR REVIEW OF A CONTINUALLY CORRECTING MARKET

The global whisky industry in 2025 is continuing to undergo a period of recalibration. After years of bullish expansion, skyrocketing cask valuations, and rapid distillery growth, the whisky market has seen a downturn over the last 18 months or so. The first half of the year has continued to reveal a landscape defined by oversupply, pricing tension, and geopolitical headwinds. The signs are clear: the industry is still maturing — and not just in the barrel.

⚠️ MARKET COOLS AS POST-BOOM PRESSURES BITE

Across the United States and UK, volume growth is slowing. American whiskey saw a 2% year-on-year decline in Q1 2025 — a consequence of excessive DTC growth, rising production costs, and reduced consumer experimentation. Meanwhile, Scotch exports grew in volume by 3.9%, but fell in value by 3.7%, revealing a drift away from premium single malts toward more affordable blends.

Distilleries that once thrived on the surge of demand are now contending with reduced distributor appetite, bloated inventories, and rising costs of goods sold. Reports suggest some smaller UK producers are deferring cask bottling altogether, waiting for more favourable margins or foreign market recoveries.

📉 SURPLUS STOCK AND DISTILLERY SHAKEOUTS

Oversupply is a real and growing issue. Some analysts predict that Scotland and the U.S. are collectively sitting on more than 10 years of future supply at current consumption rates. Inventory bottlenecks are stalling cash flow, forcing younger brands and newer entrants to consider exits, mergers, or crowdfunding lifelines.

As whisky continued to rise following Covid and the extra disposable cash customer had in their pockets, distilleries started popping up everywhere, with heavy investment. As the market then cooled, some distilleries had to bring out newer products at a much quicker rate to account for less sales and high costs. Whilst this may be great for whisky drinkers who want to try new bottles, it means a greater surplus of stock still exists with distilleries and retailers, in turn driving down the secondary market.

In the U.S., over a dozen distilleries — particularly non-distilling producers and contract bottlers — closed in Q1 alone. In the UK, brands like Holyrood and Raasay are quietly reducing output, with staffing cuts and production delays reported by trade insiders.

Meanwhile, the cask investment space — once touted as a new financial frontier — has come under increased scrutiny. The collapse of certain ‘investment schemes’ has led to a crisis of confidence, with regulatory authorities now examining how casks are marketed to consumers.

🌎 TARIFF TURBULENCE: OPPORTUNITIES AND THREATS

Tariffs remain a defining factor in whisky’s 2025 outlook.

✅ UK–India FTA: A New Frontier

The UK–India Free Trade Agreement, signed earlier this year, will gradually reduce Indian tariffs on Scotch from 150% to 40% over the next decade. As India already accounts for 14% of Scotch export volume, this agreement could unlock a multi-billion-pound opportunity — especially for mid-size and independent producers eager to access a high-growth market with evolving tastes. It isn’t all favourable however, as a number of states have their own taxes which are and may remain high, so you need to read between the fine print.

❌ US–EU Retaliation: Risk of a Tariff Spike

On the flip side, renewed trade tension between the U.S. and EU has cast a shadow over future growth. Proposed 200% retaliatory tariffs on EU spirits could severely impact Irish whiskey and Scotch bottlers operating from Europe. Even the recently reintroduced 10% tariff on UK spirits by the U.S. is tightening margins and delaying shipments. While there is hope that Scotch may be excluded in future revisions, for now, exporters must navigate a volatile and politically fraught trade environment.

🧪 INNOVATION & SUSTAINABILITY DRIVE STRATEGIC VALUE

To stay competitive in a more price-sensitive market, producers are leaning heavily into innovation and sustainability.

Cask experimentation is at an all-time high — with distillers turning to less traditional finishes like orange wine casks, calvados, and local wood varieties. These innovations not only appeal to curious drinkers but also allow brands to differentiate in saturated premium segments.

Sustainability, too, is no longer optional. Brands like Nc’nean and Bruichladdich are now carbon neutral, while others are retrofitting energy systems, exploring regenerative agriculture, and offering full supply chain transparency. Consumers — especially younger ones — are actively factoring these values into their purchasing decisions.

🛍️ CHANGING CONSUMERS, TIGHTER RETAIL

Retail dynamics are also shifting. Off-trade and DTC channels are becoming increasingly competitive. The boom in online sales has tapered, with logistics costs and subscription fatigue taking a toll. Those businesses who are lean and put customers first are reaping more of the rewards.

Many consumers are now adopting a “less but better” approach — buying fewer bottles per year but favouring quality over novelty. For example, mid-shelf whiskies (RRP £40–£60) are seeing the sharpest drop-off, while both entry-level blends and ultra-premium limited editions remain resilient.

Collectors, too, are becoming more selective. Bottles that once soared in value at auction — such as certain Macallan or Japanese releases — are seeing softer secondary prices, prompting a renewed focus on genuine rarity, age statements, and provenance.

🧭 THE REST OF 2025: WHAT TO WATCH

As we move into the second half of 2025, several trends are worth watching closely:

• Inventory management will become a make-or-break issue for many distilleries

• Trade diplomacy will shape export performance in India, the U.S., and the EU

• M&A activity is likely to accelerate, particularly as legacy brands look to acquire fresh stories, ESG credentials, or DTC channels

• Consumer trust in cask investment and brand authenticity will continue to define long-term loyalty

🥃 A TIME TO RESET, NOT RETREAT

2025 so far continues to be a recalibration. The whisky world, once dominated by scarcity and speculation, is now entering a more balanced and discerning phase. Those who adapt to market realities, focus on long-term value, and invest in innovation will come out strong.

In an industry built on patience, that shift may prove to be its most important maturation yet.