NOEL KING, HOST:
Whisky is one of Scotland's greatest exports, but the pandemic and a trade dispute with the U.S. over airplanes are affecting that. NPR's Frank Langfitt went to the Scottish Highlands.
(SOUNDBITE OF WATER FLOWING)
FRANK LANGFITT, BYLINE: The Speyside distillery sits in a valley near the town of Kingussie, more than 100 miles north of Edinburgh. Sheep graze in the field next door. There's an old stone mill. A water channel - or a laide in the Scots' language - runs alongside. Patricia Dillon, who manages the distillery, explains.
PATRICIA DILLON: The laide is the water that runs through. We draw off the laide. So a saying in Scotland is today's rain is tomorrow's whisky.
So this is our heritage room.
LANGFITT: Like many wineries, distilleries offer tours to market their products.
(SOUNDBITE OF WHISKY POURING)
DILLON: And I'll give you a dram of this to try.
LANGFITT: I've never done a whisky tasting before. Is there a special way?
DILLON: You've never done one before?
LANGFITT: I've never done one.
DILLON: Wow. I'm honored. I'm honored.
LANGFITT: Well, I guess I don't get around enough. But what do I do?
DILLON: The way I like to do it, is I like to close one of my nostrils, close your mouth and then inhale very strongly.
LANGFITT: Oh, boy.
Personal marketing like this is a staple of Scottish Highland tours. But the coronavirus shut down whisky tastings at the vast majority of the more than 130 distilleries, which ordinarily draw more than 2 million visitors a year. The pandemic has also shut down pubs and bars across the U.K. and many other countries. And an unrelated trade dispute between the United States and the European Union over passenger planes has pummeled whisky exports to the U.S., which is the largest market by volume.
Standing by a pair of massive copper stills, Dillon quantifies the damage.
DILLON: Ten percent of our turnover was hit with tariffs, so that had a great effect on our business. We're not in calm waters, but in rough sea.
LANGFITT: Last year, the World Trade Organization ruled the European Union and the United States had both illegally subsidized their plane manufacturers. That gave the U.S. the right to target various European products, including French wine and Spanish olives. The United States also slapped a 25% tariff on Scottish single malts, costing the industry more than $600 million.
GRAEME LITTLEJOHN: It is unfair that Scotch whisky has been drawn into this dispute.
LANGFITT: Graeme Littlejohn of the Scotch Whisky Association says the U.S. has also targeted other signature products here.
LITTLEJOHN: In particular, cashmere, shortbread, as well as Scotch whisky, have been drawn into this international trade dispute. It's important that sectors like ours that have no part in that dispute are taken out as soon as possible and a resolution is found.
LANGFITT: Even though the U.K. has left the EU, British products remain fair game because the trade violations occurred when the U.K. was still a member.
(SOUNDBITE OF HOPPER OPERATING)
HELEN MCKENZIE SMITH: So you can hear the grain coming out of the hopper.
LANGFITT: Helen McKenzie Smith is brand director at Lindores Abbey. It's a new distillery built next to the ruins of a 12th-century monastery, where monks began making spirits more than 500 years ago. Lindores will release its first single malt whisky in June and planned to send half of its product to America. But the pandemic and the U.S. tariffs altered that strategy.
MCKENZIE SMITH: We're starting to look east now. I mean, the Chinese market is now hugely interested in whisky. The Japanese market always has been. So it makes sense, I suppose, to maybe start to focus our business plan that way rather than looking to our usual friends in America.
LANGFITT: In addition, some East Asian countries that took tough early measures have seen their economies recover much more quickly from the pandemic.
MCKENZIE SMITH: You have to look where you think the business is going to be. It's only natural that you're starting to look to countries that look as if they're getting on to a more even keel.
LANGFITT: Scottish whisky has faced tough times before, including prohibition. What the whisky business says it needs now is to persuade the new Biden administration to drop those tariffs, which are costing the industry here more than $40 million a month.
Frank Langfitt, NPR News, Kingussie, Scotland.
(SOUNDBITE OF BELLE AND SEBASTIAN SONG, "I KNOW WHERE THE SUMMER GOES") Transcript provided by NPR, Copyright NPR.