Sources of Excellence
Perseverance under Pressure: The Scotch whisky industry during World War II
There are a certain points in history that have lasting impact, for better or for worse. The choices you make during these times can define you, and the decisions made in the past often reverberate into the present. World War II is one of the events that irrevocably shaped the Scotch Whisky industry and The Macallan, and its impact is still seen today.
With the declaration of WWII in 1939 came a government-imposed restriction on the production and sale of whisky. A number of factors led to this, amongst them enforced rationing by the Ministry of Food. Barley stocks normally used for distilling spirits were diverted to help feed the population, resulting in a rapid decrease in malt whisky production – in fact, from 1940 to almost the end of 1944, legislation prevented grain distilleries from distilling whisky to the point that almost no Scottish whisky was made, unless it was done illicitly.
The result was that the total amount of whisky distilled for the entire duration of the war was approximately the amount distilled in pre-war 1939. The rationing also drove up the price of any available stock allocated to whisky making, causing many small, independent distilleries to struggle to purchase goods at inflated prices.
The Macallan was one of these small Scotch whisky distilleries.
Scotch Whisky industry WWII facts
10.7
Million proof gallons. The amount distilled in pre-war 1939
3.2
Million proof gallons. The amount distilled as a result of reduced production in 1941, before being reduced to almost nothing until 1945
3.7
Million proof gallons. The amount produced for 1944-45 after lobbying by the Scotch Whisky Association (SWA) to alleviate restrictions to permanently avoid crippling the industry
1954
The year that government imposed allowances on whisky cereals was finally removed
Combined with the limitations on new production, and the lack of mature whisky stock as a repercussion of the previous war 21 years before, the result was that the industry was in a bind. To stay in business they could choose to dramatically deplete their mature stock which would damage their stability in the long term, or take the risk to reduce the quality of their whiskies by using less mature spirits.
No time to compromise
The difficulty of this period was also manifested through a further, more distinct pressure: because the price of ingredients was so inflated, the taxes on selling so high, and mature stock so rare, the smaller distilleries found that it was actually more lucrative for them to sell out of their current stock and benefit from the capital appreciation of their matured stock. In fact, many smaller distilleries became ‘casualties’ of this time, bought by larger firms primarily for their mature goods. Larger companies and distillery groups fared better during this time as they possessed the financial resources to weather the restrictions. This trend continued into the post-war era, as smaller distilleries were purchased both by local larger firms and foreign companies, and the drive to export increased.
Despite this immense external pressure, The Kemp Trust refused to undermine the quality of Macallan whisky. During the points in time where the industry was forced to stop distilling because of resource diversion, the Trust had the foresight keep their mature stock safe rather than make short term gains by selling it during these times.
With great tenacity, the Trust continued to hold on.
Despite the constant threat of being bought out and the harsh taxes placed on the industry at the time, The Kemp Trust refused to give in. They persevered, maintaining the distillery as a family business with no outside investment throughout wartimes. They chose not to take any steps that could undermine their future, and while it required sacrifice and fortitude, this dedication and perseverance is still integral to our vision today.