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The term whisky is derived from the Latin “aquatvitae” or the Gaelic “usque baugh”, meaning the “water of life”. Although the art of distilling may have been a practice known to some Europeans as early as the 6th century, documented records first show the distilling of whisky taking place in 1494 when Friar John Cor was given eight bolls (or approximately 1200 kilograms) of malt to make almost 1500 bottles of scotch. King James IV of Scotland was known to be quite fond of this spirit. There are records of payments found in his government accounts made for the regular purchase of “aqua vitae”.

In its earlier forms, the production of scotch was made with primitive equipment which likely helped contribute to the spirit being considerably potent and may have even be used for medicinal purposes.  The Guild of Surgeon Barbers was a group of practicing barbers and surgeons whom where granted a monopoly in whisky production in the early 1500’s.  This further laid claim to scotch’s medicinal properties.  The quality of scotch began to vastly improve with the dissolution of the monasteries as monks left the comfort of their sanctuaries relying mainly on their distilling skills.  As the art of distilling spread, so did the popularity of scotch. 

With the rising popularity of scotch, government officials saw the need to pass laws controlling its production, mainly through taxation. In 1644, the Scottish Parliament passed an Excise Act to collect a tax on the production of scotch and other strong liquors. As taxes became more widespread and increased, distillers began producing whisky illegally. Its demand continued to accelerate, significantly aided in the mid 1700’s by a new tax on Gin.

During the 1700’s, tensions increased between England and Scotland.  In the late 1700’s, there were hundreds of distilleries operating, but only a tiny fraction of them were actually paying taxes.  England reduced the legal limit of the private production of whisky and British Excisemen were constantly battling against the illegal distillers to collect on taxes.  The Scots found new and creative ways to deceive the excise officers.  By the early 1800’s, well over 1000 illicit distilleries were being confiscated each year and over half the production of whisky during this time was made illegally.

Finally in 1823, the Excise Act was passed to control the smuggling of illegal spirit thereby creating the official licensed distilling industry, although many illicit distilleries still existed. There were other factors that contributed to the growth in the Scotch Whisky industry. Up until this time, whisky was made from malt. However in 1831, Aeneas Coffey invented the Coffey Still which enabled the continuous process of distillation for the production of grain whisky. Grain whisky was less potent and tasty compared with whisky made from malt. However, soon after the initial production of grain whisky, manufacturers began blending grain whisky with traditional malts producing a lighter whisky that had a much wider appeal. Also, when the French wine and brandy industry were nearly destroyed in the late 1800’s by phylloxera, the Scots filled the void with Scotch Whisky which soon became one of the more popular spirits worldwide.

The 20th century witnessed many dramatic political and economic events that significantly impacted the Scotch Whisky industry as we know it today. The 2 World Wars, Great Depression, Prohibition, and irrational exuberance leading to over-production all led to a series of corporate failures and bankruptcies. There has been a long period of consolidation that have greatly reduced the total number of distilleries and corporate groups controlling them. There are 3 main companies that control most of the remaining malt distilleries in the world: Diageo, Pernod Ricard, Allied Domecq, and the Edrington Group.

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