Scott Laing, one of many investors attracted to whiskey production by a boom in demand, finished building the Ardnahoe Distillery in Scotland four years ago.
Now he is worried that he may not be able to spark interest in his first batch of liquor because of a row over a ban on alcohol advertising in the country.
“If we start selling (the whiskey) in the next few years, we won’t be able to promote it at all in Scotland, which is a bizarre situation,” said Laing, who runs the distillery on Islay with his brother and father, and invested £12.5 million to build it.
Scottish authorities have given the industry until March 9 to respond to a consultation on possible restrictions designed to help tackle the country’s “deep, enduring and troubled relationship with alcohol”.
Beer, wine and spirits can be deposited at the back of stores or placed in closed cupboards, similar to tobacco products, to reduce consumption.
Other proposed measures, some of which will need Westminster’s approval, include a ban on advertising in public places, as well as a ban on the sale of alcohol-branded sporting goods, including sponsorship of replica kits.
The impending advertising crackdown has been met with sharp criticism from beverage companies and retailers, who argue the Scottish government risks stigmatizing an industry that employs around 89,000 people and is a major source of investment and tourism in rural areas.
More than 100 companies have written to Prime Minister Nicola Sturgeon this month calling for the regulations to be scrapped, warning they would “destroy” the industry.
“At the time, I didn’t hear any criticism of the investment we were making in a Scottish rural community,” said Laing.
James Watt, chief executive of Scottish craft beer group BrewDog, said: “Does society at large need to evolve and improve its relationship with alcohol? Absolutely, it does. Is the answer to that a ban on alcohol advertising in Scotland? No, I think this is detrimental to Scotland.
He added: “I think a lot of the sponsorship and advertising money (from alcohol) is funding important grassroots work in sport, in the community, which is at risk. And Scotland is known internationally as the home of whiskey.”
Meanwhile, brewery Innis & Gunn, founded by Dougal Sharp in 2003, was unimpressed to see its branded wool blankets named in government documents as among the types of products that could soon be banned.
“I find it surprising that our blankets can be mentioned as a source of harm,” said the businessman, adding that the sector was tightly regulated and had invested in various campaigns to reduce the problem of alcohol consumption.
“The lack of branding for some of the most iconic brands Scotland has ever produced. . . You cannot imagine that this would make Scotland attractive to an international audience,” he said.
The resistance comes after the whiskey industry defied a weakened economy in Scotland and benefited from a surge in overseas demand that lifted exports by 37% to a record £6.2bn in 2022. strong sales in Taiwan, Singapore, India and China, the Scotch Whiskey Association said.
The response has become emblematic of the strained relationship between the Scottish government and business, with many business leaders saying their views are often ignored by ministers.
Businesses also criticized Scotland for not undertaking an analysis of the economic impact such changes would have on the country’s food and drink sector.
Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium, said: “We have a lot of proposals here, none of which have been budgeted for.”
Restrictions must be “as far-reaching as possible” to be effective, according to consultation documents, raising concerns among industry watchers that ministers have already made up their minds on their severity.
An average of 700 people are hospitalized and 24 people die each week from illnesses caused by alcohol consumption, according to official figures.
“Nobody in the government is telling people not to drink alcohol, it’s about responsible drinking,” Sturgeon said this month. “Advertising that extols alcohol can lead to excessive consumption.”
Restrictions on alcohol advertising could also reduce income from the arts, including Edinburgh’s renowned Fringe festival. Its sponsors include Johnnie Walker Princes Street, a visitor center opened by drinks giant Diageo as part of a £185m investment in Scottish tourism.
Shona McCarthy, executive director of the Fringe Society, said that while she supported the Scottish government’s health goals, the proposals came at a “particularly dangerous” time for a sector facing a “dismal” future due to a weak economy and cuts in public expenditure financing the arts. Fringe partners were “responsible and ethical,” she added.
“If you are going to open these avenues to support the art and cultural production of a nation that values itself in its arts and cultural identity, then, at the very least, we need to have a conversation about what the alternative is,” he said. said McCarthy. “It feels like all the doors are closing.”
A Diageo spokesperson said the proposed restrictions “will do little to support those who need help, while significantly impacting vital sectors such as hospitality, tourism and sports”.
The Scottish government argued that tobacco bans meant that alternative sponsors could be found.
A spokesperson said: “We are consulting views on the most appropriate next steps to reduce alcohol-related harm, no decision has been taken on the scope or the type of restrictions that may be adopted in the future.”
Additional reporting by Judith Evans