Scotch Fans, There Might Be a Peated Malt Shortage

Smaller distilleries in Scotland may lose or have restricted access to peated malt in the next few years, according to a new report by the drinks publication Master of Malt.

According to several sources (both anonymous and not) in the whisky business, the supply from Port Ellen maltings to distilleries not associated with drinks giant Diageo will be limited in 2023 and possibly stopped entirely in 2024. Port Ellen Maltings is responsible for a majority of the peated malted barley used across Islay; as Distiller notes, “Even the Islay distilleries who take pride in performing their own floor maltings on-site still acquire somewhere between 75 and 90 percent of their peated malt from Port Ellen. That makes it a singularly important player in the production of Islay whisky.”

So what happens if other, non-Diageo Islay distilleries have their access to peated malt halted or limited? “We can’t comment on the detail of commercial supply contracts, but it is the case that we have seen significant increased demand for malted barley from our Port Ellen maltings,” as Ian Smith, head of corporate relations at Diageo, told Master of Malt. “As a result, the maltings are operating at full capacity and we are managing supply accordingly. We deeply value our relationship with our fellow distillers and customers and are doing everything we can to assist them within the supply constraints, alongside considering potential future solutions.”

One issue that many distillers pointed out is that Diageo has not expanded, even with increased demand. Port Ellen — which had only been used for maltings for decades — also just recently resumed business as a distillery after nearly 40 years. And Islay’s transport infrastructure makes it difficult to secure supplies from the mainland. Additionally, some distilleries on Islay champion the fact that they source their malt from the area — and peated malt, like any other ingredient, has a different flavor profile depending on where you source it.

Master of Malt’s Henry Jeffreys conditionally notes that “there’s no need to panic buy… yet,” but we could see the same supply issues affecting, well, everything now coming to the Scotch whisky world, which might lead to higher prices, fewer choices (from smaller distilleries) and even different flavor profiles.