Scott Laing, one of many investors lured into whiskey production by booming demand, completed construction of the Ardnahoe distillery in Scotland four years ago.
Now, he’s worried he might not be able to get interest in his first batch of spirits because of the country’s controversial ban on alcohol advertising.
“If we start selling [the whisky] in the next two years, we wouldn’t be able to promote it in any way in Scotland, which is a strange situation,” said Laing, who runs the distillery on Islay with his brother and father and has invested £12.5m to set it up.
Scottish officials have given the industry until March 9 to respond to a consultation on possible restrictions intended to help tackle the country’s “deep, long-standing and troubled relationship with alcohol”.
Beer, wine and spirits could be shipped near the back of stores or placed in locked cabinets, similar to tobacco products, to reduce consumption.
Other proposed measures, some of which will need approval from Westminster, include a ban on advertising in public places, as well as a ban on the sale of alcohol-branded sports merchandise, including sponsorship of replica kits.
The impending advertising crackdown has been strongly criticized by drinks 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 wrote to outgoing first minister Nicola Sturgeon this month calling for the regulations to be scrapped, warning they would “destroy” the industry.
“I didn’t hear any criticism at the time of the investment we made in a rural Scottish community,” Laing said.
James Watt, chief executive of Scottish beer group BrewDog, said: “Does society at large need to evolve and improve its relationship with alcohol? Absolutely, it does. Is the answer to this a ban on alcohol advertising in Scotland? No, I think this is detrimental to Scotland.”
He added: “I think a lot of the sponsorships and advertising money [from alcohol] they fund important grassroots work in sport, in the community at risk. And Scotland is known internationally as the home of whisky.”
Meanwhile, brewery Innis & Gunn, which was founded by Dougal Sharp in 2003, was unimpressed to see its branded fleece blankets listed in government documents among the types of products that could soon be banned.
“I find it surprising that our blankets could be seen as a source of harm,” the businessman said, adding that the industry was heavily regulated and had invested in various campaigns to reduce problem drinking.
“Lack of branding for some of the most iconic brands Scotland has ever produced. . . You can’t imagine that would make Scotland attractive to an international audience,” he said.
The pushback comes as the whiskey industry defied a weakened economy in Scotland and benefited from a surge in overseas demand that has pushed exports up 37 per cent to £6.2bn in 2022. The growth came from 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 companies, with many business people saying their views are often ignored by ministers.
Businesses have also criticized Scotland for not carrying out 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 number of proposals here, none of which have been costed.”
The restrictions would need to be “as comprehensive as possible” to be effective, according to the consultation papers, raising concerns among industry watchers that ministers have already made up their minds about their severity.
An average of 700 people are hospitalized and 24 people die each week from alcohol-related illnesses, according to official figures.
“Nobody in government is telling people not to drink alcohol at all, this is about responsible drinking,” Sturgeon said this month. “Advertising glamorizing alcohol can lead to overconsumption.”
Restrictions on alcohol advertising could also reduce income for the arts, including Edinburgh’s famous 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, chief executive of the Fringe Society, said that while she supported the Scottish Government’s aims for health, the proposals came at a “particularly dangerous” time for a sector facing a “bleak” future due to the weak economy and cuts in the public sector. funding for the arts. Fringe partners were “responsible and ethical”, he added.
“If you’re going to remove these roads to support the art and cultural production of a nation growing in its arts and cultural identity, then at least we need to discuss what the alternative is.” McCarthy said. “It feels like all the doors are closing.”
A Diageo spokesman said the proposed restrictions “will do little to help those in need, while significantly affecting vital sectors such as hospitality, tourism and sport”.
The Scottish Government argued that the tobacco ban showed that alternative sponsors could be found.
A spokesman said: “We are consulting on the most appropriate next steps to reduce alcohol-related harm, no decisions have been made on the scope or type of restrictions that may be put in place in the future.”
Additional reporting by Judith Evans