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Recently I was invited to join the Scottish Craft Distillers Association and among some of the issues identified at the recent AGM was the impending malt problem that is likely to arise in the Whisky industry in the future.
Naturally malt is a core ingredient in Malt whisky and Whisky Blends are made up of malts too, so together these two variations make up the Lion’s share of the Scotch Whisky exports. Scotch Whisky was the UK’s second largest export contributing £135 per second to the balance of trade and in Scotland it accounts for approximately 80% of Scottish Food and Drink exports according to statistics released by the Scotch Whisky Association in 2013 (you can find more here)!
Understanding the high importance of malt in Scotch Whisky and in turn the importance of Scotch Whisky in UK’s balance of trade is of huge importance when assessing the significance of the problem. Unfortunately, Whisky has other problems too like the shortages in casks and capacity. This blog piece will just focus on the malt issue.
We have been fortunate enough to witness a 21st Century whisky boom with Whiskies breaking into new markets while maturing in others. This boom has resulted in a greater level of investment, some examples of this are the Glasgow Distillery and Diageo’s £1bn five year investment plan. In order to meet this booming demand there has been a greater need for malt and the supply of such has been stretched. At the moment Scotland imports the majority of its malt from England but with some of the largest suppliers of malts in England stressing that they are close to full capacity where will the additional malt come from to support the current distilleries and the future distilleries being built?
Scotch Whisky will not be the only sector impacted by a malt shortage, malts are used in a variety of confectionary, beers, foods and baking and although it could be argued that simply farming more malt is the answer this can only take us so far because barley and other grains which make up malt can only be farmed in certain climates with a particular agriculture not present all over the UK.
At present we are already witnessing the cost of high quality whisky rise because of the scarcity of rare old casks and in response to this the industry is attempting to find solutions such as releasing more non age statement Whisky. However, when the cost of malt rises and there is not enough malt to go around ever distillery while we see an industry fall on its own mighty sword or will it reign itself in to only produce enough Whisky as there is malt without expanding…unlikely. It could be that more Whisky is released with malt such as more grain or corns etc to fill the gap left by malt or the UK or Scotland could import barley and other grains to continue its growth, as Diageo is doing now. The final and most likely option is that investment is placed in malt suppliers to create as much farming as opportunities as possible in England with an additional investment in create efficiency to create zero waste.