Climate change could affect Scotch whisky prices
According to a report by scientists from University College London (UCL) commissioned by Glengoyne distillery, climate change could significantly reduce or even stop whisky production in some Scottish distilleries in the next 60 years. According to the researchers, the heat and drought that can be expected in the coming decades could drastically affect the price and availability of ingredients needed to make whisky: water, barley and yeast.
The report was based on the conditions recorded in 2018, when half of the Islay distilleries and two in Pertshire had to stop production as a result of the heatwave. According to estimates, the production of one liter of whisky requires the use of almost 47 liters of water.
An additional aspect is the influence of the price of barley. Despite the fact that it is relatively resistant to drought, the negative effects of heat also affect this variety. In the report, we can read that the heat wave in 2018 caused a decrease in the production of barley in the United Kingdom and an increase in its price by over 20%. The production of Scotch whisky requires approx. 800 thousand. tonnes of barley per year, so such a significant increase in raw material prices could not remain without impact on the costs for the industry.
The correlation coefficient of the barley price index in Great Britain with the average price of a 0.7l bottle of Scotch whisky in export in years 2000-2020 was 0.64, which indicates a moderately strong positive correlation between the price of barley and the price of Scotch whisky.
Due to the growing demand and consumer interest in the Scotch whisky category, especially in Asian countries, the prospect of a complete stoppage of Scotch whisky production seems unrealistic. However, the expected droughts and heat waves will certainly affect the cost of producing Scotch whisky in the coming decades, and thus may be an additional factor in the increase in the price of Scotch whisky in the world.
Source: www.heraldscotland.com
