25th March 2026
In the same month that Clynelish at Brora/Golspie falls silent, Highlands and Islands Enterprise proudly announces a £1.57 million award for a new "net‑zero" whisky distillery at Dornoch.
On one stretch of the A9, a major Diageo site—an anchor employer, a pillar of Sutherland's modern history—has closed its doors. A few miles down the road, public money is being poured into brand‑new production capacity in a sector already flashing red for oversupply.
This is not strategy. It's denial with a sustainability badge.
Scotland is living through a spirits correction. Whisky exports have softened, premium growth has slowed, and big players are quietly cutting back. Gin, once the darling of the craft boom, is saturated. Shelves are full, warehouses are fuller, and even flagship distilleries are being mothballed.
Yet in Caithness and Sutherland, the policy reflex remains stuck in 2015.
build another distillery, cut another ribbon, call it regeneration.
We now have:
A closed Clynelish at Golspie.
An expanded Dunnet Bay.
A major new distillery at Castletown, built with grants.
A heavily subsidised "world‑leading net‑zero" distillery at Dornoch.
More stills, more capacity, more risk—layered onto some of the most fragile labour markets in Scotland.
Distilleries are being treated as anchor employers, but anchors only work in a stable tide. Whisky and gin are global, cyclical, and brutally exposed to shifts in taste, trade, and tax. When the cycle turns, it is not Edinburgh or London that feels it first. It is Golspie, Castletown, Wick, and Dornoch.
The language of "net‑zero innovation" and "world‑class visitor experiences" cannot disguise a simple fact: we are subsidising more production in a market that needs less. Public money is underwriting private risk, while core public‑sector jobs are centralised out of the region altogether.
If Clynelish can close, any distillery can.
If Diageo is nervous, smaller players should be terrified.
And if the public sector keeps betting scarce funds on glamour projects instead of rebuilding the everyday employment base—council offices, NHS roles, admin hubs, back‑office teams then the Highlands will be left with beautiful visitor centres and very few year‑round pay packets.
Net‑zero whisky may look good in a press release.
But in an area where charity shops are closing, services are retreating, and young people are leaving, the real question is harsher.
How many more "world‑leading" distilleries can a shrinking market and a shrinking population carry before the stills go quiet again?
Analysis of distillery oversupply
Too Many Stills, Not Enough Throats: The Numbers Behind Scotland's Spirits Glut
Distillery count:
Whisky: Over 140 malt and grain distilleries in Scotland, with more in planning.
Gin: Well over 100 Scottish gin producers, with dozens of dedicated gin distilleries and many whisky sites also producing gin.
Capacity vs demand:
Production capacity has risen sharply over the last 10-15 years as global demand boomed.
Recent years have seen flat or falling export volumes and slower growth in premium segments.
Major producers have responded by cutting or pausing production at some sites—Clynelish being a local example.
Time lag problem:
Whisky laid down during the boom years is only now reaching maturity.
Even if demand softens quickly, supply keeps rising for years because the spirit is already in the warehouses.
Low barrier problem:
Gin requires no ageing and relatively low capital to start.
This led to a flood of micro‑distilleries and “brand‑only” gins, all chasing limited shelf space.
Consumer novelty fatigue is now visible; the “new flavour every week” era is over.
Tourism dependence:
Many new distilleries rely heavily on visitor centres, tours, and direct sales.
This model is vulnerable to seasonality, fuel prices, and wider economic shocks.
Scotland has built spirits capacity for a world of endless growth; it now faces a world of slower demand, tighter wallets, and crowded shelves.
How rural funding priorities have drifted off course
From anchor employment to “project‑based” regeneration
Then: Public money underpinned long‑term, boring, essential jobs—council offices, local tax offices, NHS admin, utilities, transport.
Now: Funding chases short‑term, high‑profile projects—distilleries, visitor centres, “innovation hubs”, festivals.
Result:
Fewer stable, pensionable jobs.
More fragile, seasonal, tourism‑dependent roles.
From needs‑based to narrative‑based investment
Needs‑based: Start with what the community lacks—GPs, admin jobs, apprenticeships, transport, childcare—and fund accordingly.
Narrative‑based: Start with what looks good in a press release—net‑zero, world‑class, iconic, destination.
Distilleries tick every narrative box: heritage, sustainability, tourism, export.
But they don't necessarily meet the core needs of a struggling rural household.
From risk‑aware to risk‑blind
Oversupply risk in whisky and gin is now obvious.
Yet grants and public loans continue to flow into new capacity as if the boom will last forever.
There is little visible contingency planning for:
what happens if visitor numbers fall
what happens if a distillery fails
how the local labour market absorbs another closure
From distributed public‑sector presence to centralised hubs
At the same time as we subsidise private distilleries, we:
close or shrink local council offices
centralise NHS functions
move decision‑making and back‑office work to Inverness, the Central Belt, or beyond
So the steady, year‑round wage base is eroded, while volatile, grant‑fuelled ventures are expanded.