The origins of Scotch Whisky
(This is the 2nd part of a series of articles on the history of Scotch whisky)
During the 18th century, the Scottish distilling industry played a vital role in the development of Scotch whisky as we know it today. Usquebaugh, a precursor to whisky, was being exported to London in large quantities, prompting London gin distillers to fight back. The first commercial distillery in Scotland, Kennetpans distillery, played an important role in this period of Scottish distilling history, as did Kilbagie distillery under the ownership of the Haig family.
Kennetpans distillery was built around 1720, making it the largest distillery in Scotland by 1733. Its location in Fife was chosen for its access to fertile farmland and a port. Kilbagie distillery was founded around 1777 and surpassed Kennetpans in size and production capacity. The distillery was powered by a burn and a thresher mill, and the two distilleries covered 850 acres, producing enough animal fodder to feed 9,000 cattle.
According to Robert Burns, the acquavitae produced at these distilleries was "the most rascally liquor and in consequence [it was] only drunk by the most rascally part of the inhabitants." However, Kilbagie distillery's greatest achievement was its capacity to produce so much spirit that it was exported to England in 1777, marking the first recorded shipment of whisky sold abroad. The spirit ended up being rectified into gin by local distilleries, leading to concerns from London gin distillers.
In response, William Pitt's Wash Act of 1784 reduced duty on alcohol and tied it to the size of pot stills and the amount of wash that could be distilled in a day. This act introduced the Highland line, which taxed distilleries at a lower rate and allowed them to use smaller pot stills, resulting in whisky with more flavor. The same act made it illegal for Highland distilleries to sell their whisky outside of their local area.
Lowland distilleries took advantage of the regulations by distilling stronger, thicker washes in shallow stills, producing low-quality whisky. However, their vast production capacity resulted in their output soon surpassing that of London gin distilleries, and by 1786, Lowland distilleries were exporting so much spirit to England that a quarter of the gin consumed in England came from Scotland.
London gin distillers lobbied Parliament, resulting in the Scottish Distillery Act of 1786, which introduced heavy duty charges on spirits destined for export and caused exports to England to collapse. In 1788, the Lowland License Act banned exports from Scotland to England, leading to the downfall of the licensed distilling industry and benefiting smugglers and rogue distillers. The local economy suffered its biggest crisis in a century.