What the 1823 Excise Act Actually Meant for Scotch Whisky

Few dates loom as large in Scotch whisky history as 1823. The Excise Act of that year is routinely described as the moment whisky became legal, the line in the sand between smuggling chaos and the birth of the modern industry.

But as whisky historian Iain Russell puts it, that version of events is far too simple.

“It’s almost as if 1823 is not the beginning, but in fact the culmination of a lot of things that had been happening up till then.”

Rather than a starting point, the 1823 Act marked the end of a long, messy experiment; nearly 60 years of failed legislation, unintended consequences and competing whisky economies that the government had struggled to tax, regulate or even properly understand.

Iain Russell & Dave Broom in conversation for the history module of the Diploma in Single Malt Whisky.

Two Whisky Industries, One Tax Problem

By the late 18th century, Scotland didn’t have a single whisky industry. It had two.

On one side were large-scale Lowland distillers, often producing grain whisky cheaply and in volume, much of it destined for rectification by English gin distillers. Their priority was price.

On the other were small-scale pot still distillers, largely Highland-based, producing malt whisky with flavour as their selling point but operating outside a legal framework that made their livelihoods effectively criminal.

“You have one Scotch whisky making industry which is catering for a different market, it’s got a different method of production, it’s on a different scale.”

Trying to tax both with the same blunt instruments had failed repeatedly. The result? Poor-quality legal whisky, thriving illicit production, and an increasingly violent smuggling economy.

Smugglers: Romance, Reality and Bad Law

The romantic image of the Highland smuggler - plucky, rebellious, freedom-loving - doesn’t survive much historical scrutiny.

As the whisky writer Dave Broom explains, smuggling was often the direct result of botched legislation, not moral defiance.

“The lowland distillers were making really pretty poor quality whisky because of legislation… anything being made in the Highlands was automatically better but it was illegal to make it.”

Many small farmers were simply doing what they had always done: turning surplus grain into a portable, valuable product to help pay their rent and survive hard times. When the law changed, they didn’t stop distilling, they were simply reclassified as criminals.

“They’re effectively criminalised because of a change in law.”

Worse still, once embedded in smuggling networks, distillers often lost control altogether, becoming vulnerable to organised gangs who were anything but romantic.

Whisky Was Never Illegal

One of the most persistent myths surrounding 1823 is that there were no legal distilleries before it. That simply isn’t true.

As Iain Russell says: “Whisky was never illegal to make. It was illegal to make whisky without a licence or without paying duty.”

Licensing had existed since the 1784 Wash Act, and legal distilleries were already operating across Scotland. Strathisla, founded in 1786, is a prime example and may well be the oldest working distillery we know of today. (Read Iain Russell's deep dive on that particular issue here.) 

Islay, too, complicates the story. While it appeared unlicensed for years, this was largely a technical illusion caused by confiscated stills and creative workarounds. By 1816, many Islay distilleries had quietly gone legal.

Control, Not Freedom: Reading the 1823 Act

When Dave Broom first read the full text of the 1823 Act, he was struck by just how intrusive it was. He said: “This isn’t just taxation… it’s a complete model of how to build and operate a distillery.”

From pipe diameters and pump placement to compulsory housing for excise officers, the Act was about total control. Every detail existed to make duty easier to collect and harder to evade.

That control came at a cost.

Licensing required serious capital investment, and many newly legal distillers had to borrow heavily to comply. When agricultural depression followed, many went bust.

Even George Smith of Glenlivet, often portrayed as the great success story of legalisation, failed within five years, the distillery saved only by a £500 bailout from the Duke of Gordon, whose own interests lay in supporting a legal, rent-paying tenant.

Who Really Benefited?

Another myth quietly dismantled in the discussion is the idea that smugglers simply 'went legit' after 1823.

As Dave Broom highlights: “The people who actually ended up with the licences were the good tenants… the guys who already had a wee bit more capital.”

Many former smugglers became workers - still men, brewers, labourers - while landlords and well-capitalised tenants shaped the emerging legal industry. Crucially, landowners had decided that control mattered more than tolerance, driven as much by fears of social unrest as by lost tax revenue.

So What Was 1823?

The 1823 Excise Act wasn’t the birth of Scotch whisky. As Iain Russell notes: “It wasn’t the start, but it was a very, very important stage in the development of what we know as the whisky industry today.”

It was the moment the government seized control, finally understanding how to regulate a complex, geographically fragmented industry. It also marked the transition of whisky from agricultural side product to structured national business.

This discussion is taken from one of four in-depth video conversations with Dave Broom and Iain Russell, now fully integrated into the History module of the Diploma in Single Malt Whisky (online and in-person). These aren’t soundbites or summaries; they’re deep, thoughtful explorations of how whisky evolved, and why the stories we tell about it still matter. If you want to understand Scotch whisky beyond the myths, this is where to start.