Tariffs, cask shortages or innovation? What the American single malt category recognition means for Scotch

American single malt is now a recognised category in whisky, with its own rules and regulations. Rosalind Erskine looks at how Scotch has influenced this new wave of whiskies and what it might mean for our national drink

American single malt whiskey was recently officially recognised as a category by the Alcohol and Tobacco Tax and Trade Bureau (TTB). This means that, like Scotch, there are recognised rules around American single malt.

These rules include that all whiskey must be made from a fermented mash of 100 per cent malted barley produced in the US; it must have a distillation proof of 160 (80 per cent ABV) or less; and an American single malt whiskey must be distilled at the same distillery in the US and the whiskey must be stored in used, charred new, or uncharred new oak barrels.

Whiskey makers are also required to stick to a 700-litre maximum capacity with the drink only stored in the US; and a straight American single malt whiskey must be aged for a minimum of two years.

For some distillers this is a dream realised, but what does it mean for Scotch whisky? One of the established American single malt brands, which has been distilling since 2011, is Westland distillery, based in Seattle, Washington.

The team in the small distillery have a goal to create a single malt that “reflects the true colours of the Pacific Northwest region”. I was fortunate to visit in 2023 where master distiller Tyler Pederson called what they are doing at Westland a “love letter to Scotch”. But will Scotch love it back?

Rosalind Erskine gives a round-up of Scotland's oldest whisky distilleries. Picture: Getty Images

As most distilleries in Scotland rely on a steady supply of bourbon barrels from America, plus the ongoing uncertainty of trade and tariffs, is this new ruling good or bad for our national drink?

Charles Maclean, author, whisky expert and co-founder of the Maclean Foundation, said Scotch would remain the “gold standard”. He said: “I don’t believe American single malts - or malt whisky from other countries, for that matter - pose a significant threat to Scotch.

“The Scotch whisky industry has faced new whisky-producing nations before, and yet Scotch remains the benchmark. There are now around 40 whisky distilleries in China, with a further 16 pending - all commissioned within the last ten years. But Scotch whisky retains a cachet built on heritage, craftsmanship and an extraordinary range of flavor profiles.

“That said, there’s potential for these newer whiskies to serve as a gateway to Scotch, much like bourbon has done. If American drinkers become more accustomed to single malts through locally produced versions, that could encourage them to explore Scotch in greater depth.

“Overall, though, I don’t foresee American single malts overtaking Scotch. There’s a rather entrenched - and perhaps slightly arrogant - belief that ‘all roads lead to Scotch’ and that it will remain the gold standard.”

Stephen Beam, master distiller at Limestone Branch Distillery in Kentucky, said the recognised category would “accelerate innovation”, but stressed it was not about competing. He said: “American single malt whiskey being recognised as a category will accelerate innovation and quality standards ... this official designation isn’t about pitching American single malts against Scottish counterparts, or single malts from any other country for that matter. It’s about appreciating another chapter in America’s rich history of whiskey making and I think many people who are new to the category will be pleasantly surprised by what they find.”

Limestone Branch Distillery | Limestone Branch Distillery

Gregor Mathieson, director of spirits at Ferovinum, the funding and logistics specialists for the global wine and spirits industry, agrees this move means more innovation and that it is good for whisky fans.

He said: “This innovation is good for American whiskey consumers, who are explorative - research shows they have an average of nine bottles of whiskey open at any one time. But in my view, the rise of American single malts and the category’s recent recognition are also positives for the global industry, including Scotch. A ‘taste of the new’ injects dynamism and consumer relevance, as we’ve seen from the arrival of other New World whiskies in the past.

“This helps the whole whiskey sector stay active and competitive, and critically it helps transition new drinkers into the category.”

Author and whisky expert Dave Broom has a mixed view on what American single malt whiskey might mean for Scotch. He said: “I think it is another development in the world of whisky, which can have both a positive and negative impact on Scotch.

“Negative because it could mean that American single malt drinkers will look locally rather than to Scotch for their supply. Even if they buy one bottle of American single malt (ASM) and one of Scotch instead of two, then it will have an effect. The positive side is, I believe, a spur to Scotch distillers to continue to up their game in terms of quality to compete with the excellent whiskies which are coming from all around the world.

“That’s good for everyone - and it is happening. Scottish distillers cannot sit back and think that just because Scotch has been the biggest seller in the world of whisky for over 100 years that it will always be that way. There is no doubt that ASM will have an impact in the medium to long term. When you get Jack Daniel’s, Jim Beam, both making single malt and also speaking of it as the next big thing, then you best be prepared.”

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While competition is one concern, another could be a declining supply of bourbon barrels in which to age Scotch whisky. These were available in large quantities as bourbon can only be aged in them once.

Now, with the advent of American single malt, could the distilleries who supply these end up keeping them for their own ageing? Mr Broom said: “I think the Scotch industry is already concerned about supply of ex-Bourbon casks. This will add to that.”

Mr Mathieson said there was no cause for alarm just now, adding: “Many US single malt distilleries are still in their infancy, emerging from the craft scene and laying down relatively small volumes each year. Bourbon cask supply to Scotland is unlikely to be affected to any scale as a result.”

A more pressing concern for Scotch in general is the potential of tariffs on whisky. Mr Maclean said: “The real concern would be punitive tariffs. If, for instance, a future US administration were to impose steep tariffs on imported Scotch, or if China did so to protect its own fledgling whisky industry, that could be damaging.”

Mr Broom added: “A trade war won't help exports on either side. In fact they could damage the American whiskey industry more because their domestic market is already saturated - certainly in terms of Bourbon - that they are needing to export, but won't be able to in the same [required] volume if we get into a tit-for-tat battle of tariffs.”

With businesses such as Limestone Branch distillery, which produce Yellowstone American single malt, increasing exports to the UK and Europe by 22 per cent, one thing is for certain - whisky fans will soon be seeing more choices of drams from the States.