Cheers: Exports of Scotch are rising

Most recession-blighted manufacturers worry that their next order is likely to be for mothballs. Not so Scotland's whisky makers: They are busy bringing old distilleries back to life and building new ones. The reason is not that the British are drowning their economic sorrows; it is that exports of single malts are booming.

"We were producing 6 million liters a year," says David Cox, a director of the Macallan Distillery, whose whisky is the third-best-selling malt (by volume) in overseas markets.

But on the wooded bluff overlooking the River Spey where Macallan has been made since 1824, stills unused since the 1980s have been brought back into use and two vast warehouses have sprouted. New capacity is adding about 2 million liters a year, says Cox, and land has been earmarked for yet more expansion.

Although sales of whisky in Britain are broadly declining, consumption elsewhere has risen. In 2007 it reached 318 million liters, up 15 percent from 1997, and $5.6 billion, at the exchange rates of the day -- an 18 percent increase.

Blended whiskies faltered in 2008 but single malts forged ahead. Drinkers have got keener on the more expensive stuff (made from malted barley and generally matured for at least 10 years) and less keen on grain and blended whiskies (usually kept for three).

The fastest-growing market has been East Asia -- particularly China, where the value of whisky sales rose from $1.4 million in 2001 to nearly $103 million in 2007, according to the Scotch Whisky Association, a trade body. In Moscow, too, there is a new market for single malt.

The shift to this more exclusive tipple means that Cox's distillery, which used to sell much of its product to whisky blenders, now keeps everything for its own lines.

Most distillers haven't enough stock on hand to meet demand, thanks to a decrease in production in the 1990s. Many are rationing the amount they sell in order to have some 10- and 12-year-old stock to market in future years as even more-expensive whiskies. Bottles of 30-year-old drink can fetch more than $1,460.

To slake the worldwide thirst, one distillery, Ardbeg on Islay, is breaking the 10-year rule and marketing a 6-year-old malt under the label "very young," an 8-year-old ("still young") and a 9-year-old ("almost there").

Cox muses about breaking out of the age straitjacket to mix 8-, 10- and 15-year-old stock under a label such as "head distiller's choice."

Others are seizing the chance to make money now. The trade association says that in 2008 and 2009, about $733 million will be spent building six new distilleries, bringing two old ones back into use and expanding five sites.

Firms profess to be unworried by recession, because whisky they make now cannot be sold for years anyway. They are confident that the Chinese and others, having developed a taste for malt in particular, will come back to it.

Dramatic evidence of this confidence can be seen at Roseisle, on the Moray coastal plain, where Diageo, a British multinational, is spending $146 million on a vast distillery. Looking rather like a beached supertanker, it is intended to pour out 10 million liters of whisky a year.

It is a bold development, especially because the success of whisky's overseas marketing has been based on emphasizing quality derived from more than a century of tradition and heritage. Whether connoisseurs take to Diageo's unashamedly modern, industrial-scale product is yet to be tested.