UK: Scotland�s malting barley industry grappling with a fresh wave of uncertainty

Scotland’s malting barley industry is grappling with a fresh wave of uncertainty as major processors move to shrink operations in response to falling demand, rising costs and a turbulent year for growers, The Scottish Farmer reported on November 21.

Despite Scotland producing more than two million tonnes of barley this season, many farmers found themselves unable to access the malting market after quality issues, particularly high nitrogen levels and poor screenings, left a significant proportion of the crop outside specification. What was expected to be a strong harvest has instead become a difficult one to place.

That pressure has been compounded by a slowdown in orders from maltsters, and signs are emerging that the sector may be entering a period of restructuring.

Bairds Malt has confirmed it will shut its Pencaitland plant early next year, a move that will result in 19 redundancies. A company spokesperson described the decision as part of the firm’s long-term operational planning.

Simpsons Malt, meanwhile, is seeking voluntary redundancies across its two maltings and six grain storage sites as it targets £3 million in cost reductions.

Managing director Tim McCreath highlighted the wider backdrop: “Over the past 12 months, the downturn of the distilling industry has been well-documented, while the brewing industry continues to face cost pressures.”

He stressed that long-term contract holders would be protected: “All growers who are on long-term contracts with us through harvest 2026 will be supported.”

However, he made clear that the pinch arrived months ago. “The biggest impact on our contracted growers came in autumn 2024, when it became clear through conversations with our distilling customers that the spring malting barley requirement for harvest 2025 would be lower than in previous years,” he said.

“As a result, we took the difficult step of informing our contracted growers in autumn 2024 that demand was decreasing and that our future spring malting barley requirements would be lower.”

NFU Scotland’s crops committee chairman, Jack Stevenson, said the reports are ringing alarm bells for growers already battling difficult trading conditions.

“Any signs of contraction in Scottish malting capacity are concerning for growers supplying this market, and highlight pressures right across the supply chain,” he said.

He noted that farmers are still dealing with the fallout of weather-damaged crops, global market volatility and high input costs. “Our members want Scottish-grown barley to continue to have strong, local demand from a competitive and sustainable malting sector.”

The union has been engaging with processors and market analysts to gauge the longer-term impact of reduced capacity.

According to Scotland’s Rural College (SRUC), requirement from maltsters has already dropped sharply this year and is unlikely to recover fully for at least a couple of seasons.

AHDB figures reinforce that picture, showing that barley use by UK brewers, maltsters and distillers fell by almost 18% in September to 115,000 tonnes.

Charles Tozer, chairman of the Maltsters’ Association of Great Britain, said the industry is being squeezed from several directions. He explained that broader economic conditions and geopolitical instability have softened demand, particularly from whisky distillers, while exporters have struggled in weaker overseas markets.

At home, some segments remain resilient. Mr Tozer noted that the domestic brewing sector is holding up comparatively well, but warned that high energy costs are eroding competitiveness: UK maltsters are facing steeper energy bills than rivals in other countries, creating an additional barrier to recovery.

The convergence of lower demand, costly production, and uncertain grower confidence leaves the malting barley supply chain in a delicate position. What had been a bumper harvest in terms of volume has not translated into security for growers, and the prospect of more maltsters trimming operations threatens to reshape the landscape further.

For now, farmers are left hoping the current turbulence is short-lived. But with the distilling sector slowing, global trade under pressure and energy costs showing little sign of easing, Scotland’s malting industry may be entering a period of prolonged adjustment rather than a brief dip.