The first tax on spirits in Scotland was set in 1644, at a rate of 2s. 8d for "everie [sic] pynt of aquavytie or strong watteries sold within the countrey", with further increases half-a-dozen times the following 60 years. After the Act of Union in 1707 the parliaments of England and Scotland were as one, and the same taxes on distillation applied to both. In 1715 the English Malt tax was put in to affect in Scotland too and increased in 1725, making it one of the major contributing factors to the Jacobite uprising and riots that were frequent in the time. But even with heavier taxes the distilling industry continued to prosper, since uisgebah (whisky) could be made form other cereals too.
One of histories most prominent malt distilleries from the same period, and the first large distillery to flourish in Scotland, was Ferintosh. The distillery at Ferintosh became an incredibly lucrative operation after its owner was granted a tax break for support of the new Dutch king, William of Orange, who took to the British throne in 1689. No taxes meant the product could be sold cheap, meaning the other tax paying distilleries were fighting an uphill battle when competing with Ferintosh.
Growth for Scottish distillers continued up until 1752, with the annual output almost doubling in the space of ten years. The future looked good until disaster struck in in 1757, marked by a massive crop failure that forced the British government to prohibit the sale of distilled spirits for three years. The use of a private still was not prohibited however and so long as its wares were used only for household consumption no law was broken. No enterprising Scotsman in their right mind would lie down just like that and so started illicit distilling and smuggling on a massive scale. By the time the ban was lifted it was already too late, duty-free whisky had a good taste to it and the illicit still men had little inclination towards paying taxes. And it was the game of taxation that seemed to govern the prevalence of illicit operations for the next 50 years, increasing dramatically when the risk of being caught was out balanced by the reward. A sudden increase in duty meant the sprouting up of new illicit distilleries by the hundreds.
It seems like the government were too slow to recognise that things were getting out of hand and Excise officers were simply too soft on those caught in the act of illicit distilling, with early records of some individuals being caught three or four times in a short space of time. By the time the authorities got a handle on the scale of the problem, it was already endemic and far too big to police or manage, regardless even of the severity of the punishment.
The risk to the clandestine operatives of course was not a particularly great one. The various inaccessible, islands, glens and crags of the Highlands (many of which have given their names to present day legitimate distilleries) provided ample seclusion from the prying eyes of the Excise officers, who were also known as gaugers - named for their "gauging" of the malt to assess its duty. The Glendronach distillery in Speyside is one such operation that picked its location very carefully. Situated adjacent to natural springs, it meant that there was an abundance of good clean water, but even better than that were the colony of rooks who nested nearby and were prone to screaming whenever anyone approached at nighttime - as good a security alarm as anyone could wish for.
The ‘legal’ distilleries now had to compete on price with both the Duty-free Ferintosh distillery, as well as illicit operations that also weren't paying any tax. Many of them reacted the only way that they could, and took measures to fake their Customs and Excise production declarations in an attempt to reduce their tax bill. The government got wise to this pretty quickly though and enforced a series of strict and oppressive measures that aimed to control the few remaining legitimate operations. In 1774 William Pitt’s Wash Act was passed, which required Lowland stills to be a minimum of 400 litres in capacity and taxed on their size, not their output. Highland distillers were granted more lenient taxes, based on the volume produced, and permitted to use smaller stills of a minimum 91 litres. The only problem was they weren’t allowed to sell it outside of the Highlands. The Wash Act drew a deep line in the sand between how Lowland and Highland distilleries operated, encouraging the distillers in the South to build stills that could distill very quickly, albeit with a significant drop in quality. In the Highlands there was less rush, and the spirit was said to be of a much greater standard than the Lowland swill… but only available in the Highlands. The enforcement of these differing taxes is one of the reasons for the distinction between the lighter lowland a bolder highland styles we have today.
As the 18th century drew to a close the ongoing Highland clearances, also known as the ‘expulsion of the Gael’ only served to fuel the fire of resentment that burned for the British Government. Any perception in the Highlands that smugglers were wrong doers, or law breakers, had been replaced by an acceptance of it as a profession and even as a god given gaelic right. Both the duty and the punishment for non-compliance were further increased and Scotts rebelled, resulting in what almost amounted to all out warfare.
The rate of taxation on whisky fluctuated greatly over the years, as much as tripling in war times when the British government needed the cash, and settling down again during times of peace.
Whisky would be distributed amongst towns and villages by ‘bladdermen’, so called because concealed beneath their britches would be a bladder full of uisge beatha. Highland Park distillery on Orkney (see pox) were known to seclude casks of whisky in the hollow pillars of nearby St. Magnus Cathedral, despite the attending Reverend reaffirming ‘thou shalt not make whisky’ in his Sunday service.
During the same period it has estimated that Edinburgh had around 400 distilleries; 11 of them were licensed.
The 1823 Excise Act changed everything however, duty on Scottish whisky was cut by more than fifty-percent, down to the manageable rate of 2s. 5d. per gallon. For many business minded distillers this was an opportunity to legitimise their operations and grow their businesses. Glenlivet, Fettercairn, Cardhu, Balmenach and Ben Nevis are just some of the distilleries that are still operational today, that saw their chance and licensed their operations during this time. By 1825 there were 263 licensed distilleries in Scotland, all of them free to produce whatever volume of spirit they wished. Quality naturally improved, since it’s so much easier to make good whisky when you don’t have to hide it from anyone, as did quantity, and the operations that chose to avoid the duty were soon forced out of the market place with records of seizure in Scotland dropping from a post-Excise Act high of 764 in 1835, down to only 2 in 1875.
The smuggling in Scotland didn’t stop there mind you. The tax on spirits was much higher in England than Scotland during the 19th century, to the tune of 8s. per gallon. Licensed scotch distillers, many of which had plenty of experience of the smuggling lifestyle, developed ever more ingenious methods to smuggle their mountain dew over the border, even going as far as to train dogs to swim across rivers with pig bladders full of whisky in tow. Practices like that were small time however, there were bigger operations taking place as some estimates place the volume of Scottish duty paid whisky crossing the border in the 1820’s in upward of ten-thousand gallons every week (that’s a lot of dogs). Many of the distillers would travel in armed groups, each carrying 30 litres load of spirit tied to themselves in metal canisters; most of the time excise officers were simply too scared to approach them - who can blame them?
Even up until the 1980’s it was normal for Excise Officers to live ‘on site’ at the distillery. One distillery manager once candidly told me that “To be a distillery worker you have to have a real genuine love for drinking whisky, but to be an Excise officer you have to have an even bigger love.”
