Scott Laing, one of the many investors enticed into whisky production by a boom in demand, finished building the Ardnahoe Distillery in Scotland four years ago.
Now, he is concerned that he may not be able to drum up interest in his first batch of liquor because of a mooted ban on alcohol advertising in the country.
“If we start selling [the whisky] in the next couple of years, we wouldn’t be able to promote it in any way within Scotland, which is a bizarre state of affairs,” said Laing, who runs the distillery on Islay with his brother and father, and invested £12.5mn to erect it.
Scottish officials have given the industry until March 9 to respond to a consultation on potential restrictions meant to help tackle the country’s “deep, longstanding and troubled relationship with alcohol”.
Beer, wine and spirits could be consigned to near the back of the shops 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 prohibiting the sale of alcohol-branded sports merchandise, including sponsorship on replica kits.
The looming crackdown on advertising has been met with staunch criticism from drinks companies and retailers, which argue that the Scottish government risks stigmatising an industry that employs about 89,000 people and is an important source of investment and tourism in rural areas.
More than 100 companies wrote to departing 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 were making into 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 to ban advertising of alcohol in Scotland? No, I think that’s detrimental to Scotland.”
He added: “I think a lot of the sponsorships and advertising money [from alcohol] fund important grassroots work in sports, in the community, which is at risk. And Scotland is well-known internationally as the home of whisky.”
Meanwhile, brewer Innis & Gunn, which was founded by Dougal Sharp in 2003, was unimpressed to see its branded fleece blankets named in the government’s documents among the type of products that could soon be barred.
“I find it surprising that our blankets could be talked about as a source of harm,” the entrepreneur said, adding that the industry was tightly regulated and had invested in various campaigns to reduce problem drinking.
“A lack of branding for some of the most iconic brands that Scotland has ever produced . . . You can’t imagine that this would make Scotland appealing to an international audience,” he said.
The pushback comes after the whisky industry defied a weakening economy in Scotland and benefited from a surge in demand overseas that pushed exports up 37 per cent to a record £6.2bn in 2022. Growth was driven by strong sales in Taiwan, Singapore, India and China, the Scotch Whisky Association said.
The response has become emblematic of the strained relationship between the Scottish government and companies, with many business leaders saying their views are often ignored by ministers.
Businesses have also criticised Scotland for failing to conduct an analysis of the economic impact such changes would have on the food and drinks sector in the country.
Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium, said: “We have a lot of proposals here, none of which have been costed.”
The restrictions should be “as comprehensive as possible” to be effective, according to the consultation documents, raising concerns among industry observers that ministers have already made up their mind on their severity.
An average of 700 people are hospitalised and 24 people die each week from illnesses caused by drinking alcohol, according to official figures.
“Nobody in government is telling people not to drink alcohol at all, this is about responsible consumption,” Sturgeon said this month. “Advertising that glamorises alcohol can lead to overconsumption.”
Restrictions on alcohol advertising could also cut income for the arts, including Edinburgh’s renowned Fringe festival. Its sponsors include Johnnie Walker Princes Street, a visitor centre opened by drinks giant Diageo as part of a £185mn investment in Scottish tourism.
Shona McCarthy, chief executive of the Fringe Society, said while she supported the Scottish government’s health aims, the proposals came at a “particularly dangerous” time for a sector that is facing a “bleak” future owing to a weak economy and cuts to public funding for the arts. The Fringe’s partners were “responsible and ethical”, she added.
“If you are going to take away those avenues to support the art and cultural output of a nation that bigs itself up on its arts and cultural identity, then at the very least we need to be having a conversation about what is the alternative,” McCarthy said. “It feels like all the doors are closing.”
A Diageo spokesperson said the proposed restrictions would “do little to support those in need of help, while significantly impacting vital sectors, such as hospitality, tourism and sports”.
The Scottish government argued that the ban on tobacco showed that alternative sponsors could be found.
A spokesperson said: “We are consulting on views on the most appropriate next steps in reducing alcohol-related harm, no decisions have been taken on scope or on the type of restrictions that might be taken forward in future.”
Additional reporting by Judith Evans
