Suntory Launches Redundancy Plan At Two Islay Distilleries

Suntory Global Spirits has confirmed that its Laphroaig Distillery and Bowmore Distillery on Scotland’s Islay island will merge their production teams as part of an operational restructuring, while offering employees a voluntary redundancy programme.

A spokesperson for Suntory Global Spirits said the changes are intended to balance production with maturing stock and ensure the long-term health of the brands.

“These are responsible, forward-looking adjustments to balance distillation with maturing inventory and protect the long-term health of the brands,” the spokesperson said.

When asked how many employees had been offered voluntary redundancy, the spokesperson added: “It is entirely voluntary, confidential, and supported by HR. It’s simply there as an option for colleagues who feel that the new single-team structure may not suit their individual needs.”

The company also confirmed that visitor centres at both distilleries will remain open. Suntory plans to implement a “robust capital investment programme” at the two sites over the next three years, signaling confidence in the brands and in Islay’s long-term development.

Founded in 1899, Suntory Holdings has grown from a wine importer into a global beverage and spirits company with businesses spanning alcohol, soft drinks and health products. In whisky, Suntory has built a geographically diverse portfolio through Suntory Global Spirits, covering Japanese, Scotch, American and Canadian whiskies.

In Scotland, in addition to the Islay single malts Laphroaig and Bowmore, the group also owns Auchentoshan Distillery, Glen Garioch Distillery and the blended Scotch brand Teacher’s, among other assets.

However, in the current market cycle, a large brand portfolio does not necessarily offer greater protection. The global whisky sector is facing cyclical pressures driven by slowing consumption in some markets, U.S. tariff policies and post-pandemic inventory corrections. Recent reports suggest that around one-fifth of Scotch whisky distilleries are experiencing varying degrees of operational difficulty.

A China representative for a Scotch whisky distillery told Vino Joy News that the global whisky market is currently “full of challenges.”

“Premium whisky is continuing to decline globally, while entry-level products are still growing. But younger consumers are losing interest in spirits overall, which will affect the industry’s long-term fundamentals,” the representative said, speaking on condition of anonymity.

Export data signals cooling demand

Trade data supports that assessment. In 2025, global exports of Scotch whisky totaled about £5.36 billion (approximately $7.4 billion), down around 0.6% from 2024. Export volumes fell about 4.3% year-on-year.

Weakness in the United States — the largest export market for Scotch whisky — has been particularly evident. Shipments to the U.S. fell to roughly 120 million bottles (700ml) in 2025, below the level recorded in 2024.

Between May and December, exports to the U.S. declined further after the introduction of a new round of tariffs. Export volumes fell about 15% year-on-year during that period, while export value dropped roughly 7%, suggesting the market has moved from slowing growth to a more substantive adjustment.

Suntory is not alone in tightening supply. Brown-Forman’s Glenglassaugh Distillery has also reduced roles due to its shared production model with sister distillery BenRiach.

Last month, Diageo announced the closure of the visitor centre at its Clynelish Distillery in Brora. The site had undergone a major renovation less than four years ago as part of Johnnie Walker’s “Four Corners” tourism project, which involved investments worth several million pounds.

Still, the Scotch whisky representative said emerging markets such as China continue to offer structural opportunities.

“Although competition in China is intense right now, whisky awareness there is still at an early stage. Many consumers have yet to form stable drinking habits. With patience and long-term investment, there is still room for growth,” the person said.

Against a backdrop of slowing global demand and ongoing inventory adjustments, Suntory’s integration of operations on Islay may reflect a form of cycle management — tightening production during a downturn to preserve flexibility for the next wave of demand recovery.