How Lowering Taxes Killed The Scotch Moonshining Industry | VinePair

How Lowering Taxes Killed The Scotch Moonshining Industry

1 minute Read


How Taxes Killed The Scotch Moonshining Industry

When you think of “moonshiners” you tend to think of overall-clad dudes secretly tending illegal stills in the rugged foothills of Appalachia. And then, for some reason, appearing on a television show about it.

But Scotch has its own history of moonshining. In fact, a lot of Scotch whisky has its origins in smaller-scale, illegally operated distilleries. And yes, the terrible tyrannical British Empire was partly to blame.

See, in the early days of Scotch production—the first written mention is from 1494, but it had likely been going on for centuries—most distilling was done at home, integrated with the regular activities of a farmstead. Not that Scottish parliament entirely ignored their moonshiners; they levied taxes if and where they could. But when the Act of Union of 1707 was passed, Scotland was brought under British rule. And if you remember anything about the Revolutionary War, you’ll remember how very much the Brits liked to tax their colonies. So-called “excisemen” were unleashed upon the hundreds of illegal Scotch distilleries, most of which eventually took their production underground (sometimes literally; one distillery went so far as to divert the smoke from his peat fire to a nearby cottage, so it would simply look like a—delicious—chimney fire.)

While the distillers hid their operations, taxes kept going up. Between 1793 and 1797, tax on Scotch whisky increased from 9 to 54 pounds—and by 1803 it was a staggering 162 pounds. Taxes didn’t deter the distillers; by that point, whisky was a way of life for the Scots, and illegal production continued even as excisemen and distillers fought and riots broke out over new attempts at taxation.

The Scottish Highlands

The Scottish Highlands

By the late 18th Century, there were only eight tax-paying distilleries—and 400 illegal producers. It was only when the Duke of Gordon realized how much potential revenue they were losing in taxes that the folks in charge got a genius idea: lower the taxes on all Scotch whisky, bring moonshiners out of their hiding places and into the light of day (and legality), and collect moderate taxes on all that delicious hooch.

The Whiskey Excise Act of 1823 was basically the death knell for all those illegal operations. And it was a bit of a genius move. Even though tax issues would continue to encourage smuggling (in 1830, per-gallon taxes kind of skyrocketed), over the course of the 19th Century, some of the most famous Scotch distilleries were—legally—founded. So yes, in a case of mild Scotchy irony, taxes helped the underground whisky trade thrive, and then, after those same taxes were moderated, they helped the above-board whisky industry thrive. Taxes never tasted so good.

, ,


Share This!