Scotch Whisky: History, Heritage and the Stock Cycle

This article is concerned with one of the UK’s major export successes of the last century, Scotch whisky. The economics of the production process place considerable onus on firms to forecast demand for up to a decade ahead. History reveals the difficulty in achieving this, with clear cycles of over-production and under-production as firms attempt to adjust their stock portfolios. No sooner has leadership emerged to encourage a more strategic approach to the stock cycle than market forces encourage some firms to break ranks in pursuit of alternative objectives. With the industry having consolidated further following the large mergers of the late 1990s and 2000s, it is tempting to assume the vagaries of the past are over. Current record production and stock levels, however, are set to test this proposition as Scotch sales are now below the peak level of 2011.