The Great Islay Whisky Bubble?

Islay Whisky News & LinksIt’s been rumoured for a while, now it’s official: Yet another whisky distillery is being planned to be built on Islay. Assuming it obtains all the necessary permissions it will be built just outside of Port Ellen. Including this latest project there will be 12 distilleries on Islay in operation, under construction or are planned (and I wouldn’t be surprised if that list isn’t the last word. Port Charlotte seems to be gone off the radar, but never say never):

  1. Ardbeg
  2. Lagavulin
  3. Laphroaig
  4. To be named new distillery by Elixir Distillers outside of Port Ellen, rumoured to be ‘Farkin Distillery’
  5. Port Ellen (to be rebuilt and reopened by Diageo)
  6. Bowmore
  7. Gartbreck (planned)
  8. Bruichladdich
  9. Kilchoman
  10. Caol Ila
  11. Ardnahoe (under construction)
  12. Bunnahabhain

That’s a lot of distilleries.

Many say that’s good. More Islay whisky to enjoy and there’s still growing demand around the world. More jobs. More distilleries to visit. More visitors to Islay. Islay becoming an ‘industrial powerhouse’.

I’m not so convinced.

To start with there’s the problem of the infrastructure. Same as everywhere else in the UK (I live in the south east of England and it’s bad even here, potholes even on major roads not repaired for ages) the roads on Islay are crumbling, at least in part because of the heavy distillery lorries for which they were never designed pounding them. I don’t see that improving any time soon, the council simply hasn’t got the money with the ongoing austerity and funding cuts. Then the ferry situation (remember that a lot of the whisky is ferried off the island in tankers for maturation or bottling, and if matured and bottled on Islay the bottles have to be ‘imported’ and the filled bottles transported off), again I don’t see that improving any time soon. Even if new ferries are funded for Calmac it will take many years until they are all fully in service, not to forget that the ones in service will be aging and starting to break down as well.

But more importantly: I see a monoculture. I see a potential bubble.

In my eyes more distilleries mean more dependency on whisky (and gin). More distilleries don’t make Islay an industrial powerhouse, it makes Islay a powerhouse for just one thing, whisky. And if whisky (and in particular peaty whisky) ever runs into trouble it will hit Islay badly.

I remember my first visits to Islay 20 years ago. Ardbeg was only just reopening. Bruichladdich was still closed, I remember driving past the locked gates. I remember reading about workers being laid off when Bruichladdich closed. Port Ellen had been closed over a decade ago. Sure, at the moment whisky and in particular Islay whisky is booming, sales and demand are soaring. But fashions change, consumer preferences change, who is to say that Islay single malts won’t fall out of favour at some point sooner or later? I remember the dot com bubble. I remember the housing bubble. I remember reading the only way is up. Until the bubbles burst.

And I’m concerned that Islay could be badly hit then, as it doesn’t have an awful lot else to fall back on. It’s not an ‘industrial powerhouse’ where people can move to alternatives. I have to openly admit I don’t know how this could be achieved, but I feel it would be better for Islay to diversify, to have other options. May be renewable energy is an option that could be pursued. There was a lot of hype about tidal energy the last few years, but that seems to have gone rather quiet unless I have missed something. May be the roll out of fibre broadband internet could be restarted (from what I’ve heard it seems to have faltered?), opening up opportunities for people to properly ‘telecommute’ from Islay?

Those are just my thoughts when hearing of yet another distillery on Islay. I’m sure many will disagree, I think some might think along similar lines as me. Feel free to leave your thoughts in the comments.

Author: Armin Grewe

I blog about Islay.

67 thoughts on “The Great Islay Whisky Bubble?”

  1. Well said Armin,must agree, what happens like you say if there is a slump in Whisky consumption in decades to come.

  2. Armin, I first e-met you when I was planning my first Islay trip… Probably sometime in 2009. We exchanged messages, I started to follow you online and on and off our paths crossed quite a few times here and there. I, like anybody else planned my first trip inspired by whisky but after the first time I stepped on the island and met the locals, shopped in the tiny shops, had tea and cookies with old ladies, rode the busses with school children I quickly understood that the island meant way more than only whisky… I started to respect it in a different way. Same thing happened to me for Campbeltown as well. It is easy to cheer for another distillery on a tiny island from thousands of miles away from your living room and start to dream sipping your first dram of the very first bottling of that distillery but if you get in contact with locals once you definitely start to think differently… Maybe it is the way I travel, I don’t know. The most memorable dram I had on Islay was and still is the “Scottish Leader” the guy at the counter bought me at Ardview Inn because he liked my choice of Simple Minds on the jukebox. We got drunk bad that night together… You always remember places with its characters… To make it short; yes, I do think along similar lines as you… Thanks Armin…

  3. The Population on the Island is less than 4000 so it’s mostly uninhabited. This is a good thing. Huge demand globally for these spirits so I say great and its a good for the jobs and local economy. The metrics would probably show the island economy is mostly spirits. If they are looking for workers I’d love to work at a distillery and learn all about it.

  4. Armin Grewe I think this is an example of a recession “Proof” industry. If there’s a black Tuesday the first thing people will do is reach for the bottle of the liquid Gold ($$$). Anyhow the stuff will sit in casks for at least 12 years anyway.

  5. Armin Grewe the monoculture of the island is probably sheep. It’s mostly grassland so goat cheese lamb and wool seem like logical produce (salmon?). Goods like produce will fair better in tough economic times that tourism will. Tourism is discretionary expenditures whereas food is a necessity.

  6. I read about some small islands off the north shore where there are ancient settlements. I also read about one of the oldest Celtic crosses in Europe. The Island should be in the process of developing and cataloging all of those archeological sites to promote ethnic (gaelic and celtic) tourism so people can go and see the ruins and see displays etc. Then go for some of the local fish and brew at a nice restaurant or camp on a beach.

  7. Tim Helmer they already do this. Although camping on beaches is not the wonderful idea it sounds and can lead to all sorts of pollution unfortunately.
    The produce you mention is and can only ever be relatively small scale.
    Armin’s point is basically about ‘putting all your eggs in one basket’. Have you been to Islay? If you know the island, you will know what he means

  8. Irena Krasinska-Lobban I have my grandmothers History of Islay book, family photos from the 1850’s and Laggan Farm and that’s about it. I plan to visit the island in the next 5-10 years. Never been there. Diversification is great but obviously with only 3500 residents the public coffers are limited as to what they can do. It’s a sleepy place I gather.

  9. I think it’s the Ileachs who should decide what can be done. Outside interference in a small(ish) community can be very detrimental. The highlands and island have suffered greatly at the hands of people and organisations who have changed things ‘for their own good’.

  10. In recent years the island has lost nearly all of its dairy herd and its cheese making. Sure there remains sheep and beef. Farmers are turning to growing barley for the ethos of Islay whisky completely from Islay.
    Yes, Islay whisky has a global market for single malt and for blending and the current distilleries can sell all they make.
    Two things worry me, all eggs in one basket – if something happens to global whisky consumption, Islay is in serious trouble, the other point is that the island infrastructure, specifically road, ferry, waste disposal and water supply are under considerable strain at present. With existing distilleries looking to massively increase production and 4 new distilleries in the pipeline, in addition to rum and gin production, can the island cope??

  11. Some good points made in your post, not least regards infrastructure. I’ve said elsewhere that I think the drinks industry needs to feather its own (island) nest a little bit more and provide some financial support. /continued….

  12. That seems odd when you take into account the island population was double what it is now during the late 1800’s. Just goes to show how wasteful of resources like water the modern lifestyle is. The water these distilleries use is metered no? Hopefully if they’re not using native peat filter water they pay their fair share for the upkeep and development of the local water supplies. I just spent the last hour going through the Wikipedia page on Islay. Seems to me the Island has always been in the ownership of one individual or another; Dominus Insularum—”Lord of the Isles”. Perhaps some day in the future the Island can buy back its own land so that the locally elected government and island inhabitants can take a more self directed approach rather than letting external market economics dictate the course of business. That would be a first in the Islands long and complex history.

  13. Michael Small Drastically altering the culture is not likely unless people start moving back onto the island and it reaches its former population of over 7000. Back in the day most folks were farming but to see economic growth on the island perhaps some other industry could be started. There is the potential for mining perhaps. The Island has a complex geology. I’m just brainstorming here because some of the people on this post have expressed worry for the Islands economic future. Not like Pitcairn Island though, now there is an island in trouble. They actively encouraging people to move to the island.

  14. Jim Loudon Yes I see that and then by 1891 it was down to just over 7500. My great grandfather John Dunlop rented Lagan Farm but eventually he became annoyed at the increasing rent so they sold everything and moved to Canada in about 1900.

  15. Jim Loudon oh, well that is just great, it’s like socialism but on a small scale. They set a good example. A person could just take out a 99 year lease from the community. All profit stays with the island and is not bleed off to external landlords living elsewhere where they no doubt spend the profits to suit themselves and not the community that generated it.

  16. Islay is an interesting economic example. If I wanted to buy land from a wealthy landowner I need to waive a big bag of cash in his face. If the Island has 15000 people on it the cost goes up because the occupants are busy making money and can afford rent. If the Island is barren guess how much it’s worth? Not much. So the loss of population on Islay in the last century and a half is the direct result of the landlords putting an economic pinch on the Islanders and mismanaging the Islands financial well being. Kind of like slum lords who buy a hotel, bleed it for money yet not spending a penny on upkeep then turning it over for a profit. They destroy the hotel and make a big bag of cash. It’s sick. I think the concern of some of the posts on this thread for the future of the island are well founded. Perhaps the time has come for Islay to take back the Island and set up a trust fund like Eigg did.

  17. You are being very unkind to the landowners on Islay,Tim Helmer, The land on Islay is, in the main, well managed and the owners do not put an ‘economic pinch’ on the inhabitants. In fact they are quite generous benefactors to the community in one way or another.
    Whilst the owners of the larger estates may have business interests on the mainland they maintain homes on Islay and they and their families spend time there. They reinvest in their estates. Why would they not? The downtrodden tenants of the cruel landlords are, thankfully, confined to history as far as Islay is concerned – this is 2018 not 1818. They certainly are NOT like slum landlords.
    If you wanted to buy land you would have to pay the market value and only if that land was put up for sale.
    I would suggest that Wikipedia is not the best source of information if it is presenting such a feudal view.
    The various land owners – and the rest of the population – all pay taxes of one sort or another. Some of these – e.g whisky duties, going straight into the UK Treasury others – i.e. Council Tax go to Argyll and Bute Council, under whose jurisdiction Islay lies.
    There is not and never will be a ‘locally elected government’ on Islay and not possible for all monies generated to remain on the island.
    Regarding buy outs – Eigg and Gigha are completely different – both these islands were private land in the ownership of one person with, inthe case of Eigg, no publicly owned infrastructure such as roads. Islay is in the ownership of many with a road networking owned and maintained (albeit not very well) by Argyll & Bute Counciland I would doubt whether Ileachs would ever want a ‘buy out’.
    If even a small part of the whisky revenue, i.e. taxes & duty, from these many distilleries was allowed to stay on, and be invested in, Islay the infrastructure could be upgraded to cope. As things stand this will never happen.
    As for the water, distilleries on Islay and the mainland draw their water from natural sources – mostly springs – and I do not know of any who draw from public water supplies.

  18. Additionally – do not mistake uninhabited for unuseable. The land may not have dwellings but every acre of Islay is used for something, whether it is arable -used for crops; grassland – grazing for cattle and sheep; moorland – grazed by sheep or shot over for grouse, deer etc or for forestry; or water – let for fishing.
    Yes, the population has decreased, as have populations all over the highlands and islands. Small crofts are not economically viable and the larger farms, on the mainland as well as Islay and other islands, became mechanised and no longer require a large workforce. People’s expectations have changed and sons and daughters are no longer expected, nor do they necessarily wish, to stay at home following the family occupation whatever that may be.

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