The UK spirits sector faces significant economic pressures from multiple fronts. US tariffs, domestic tax increases, and rising labour costs are collectively squeezing margins, prompting distillers to reassess production efficiency.

The US, the UK's largest spirits export market, accounted for £1.28 billion in exports in 2024 – nearly 20% of total spirits exports according to UN Comtrade data. The 10% US tariff imposed on UK goods presents a considerable challenge, particularly for whisky distillers already burdened by high domestic taxes. Mark Kent, Chief Executive of the Scotch Whisky Association, highlighted these challenges: "The industry is facing the significant challenge of US tariffs and increasing domestic pressures," he said in a recent statement.

Domestically, spiralling duties exacerbate the situation further. A 10.1% increase in spirits duty announced in March 2023, followed by another rise of 3.65% in the October Budget, has dampened industry confidence significantly. According to the Scotch Whisky Association, three-quarters of surveyed distillers expect to defer investment or invest outside the UK due to the high tax burden, while a quarter anticipate job cuts due to economic headwinds.

Adding to the financial strain, National Insurance Contributions (NICs) have seen large increases, raising the total labour cost for a full-time worker on a living wage by 44% between 2021 and 2025, according to Oxford Economics.

Untapped opportunities in automation

These rising costs create an urgent case for automation – particularly given substantial untapped potential in the industry, according to Mikkel Viager, Principal Advisor at HowToRobot, a company specializing in independent guidance and sourcing support for businesses looking to automate.

"Automation directly addresses the industry's growing cost pressures by improving efficiency, reducing labour costs through improved productivity, and increasing product consistency and quality," explains Viager. 

"There is significant potential to automate beyond the core bottling line itself. Many bottling operations receive bulk beverages externally, with automation currently often limited to basic filling processes. Internal logistics – such as handling inbound packaging, depalletizing bottles, moving caps and closures, and palletizing finished products – remain largely manual and represent clear opportunities for cost reduction and efficiency."

Furthermore, recent advancements now allow automation in smaller operations previously considered unsuitable for such investments. Modular and adaptable technology means bottling lines can more easily handle multiple bottle types, and advanced vision systems with built-in machine learning are making quality inspection both affordable and highly efficient.

"Automation of quality inspection is a low-cost, high-return entry point," says Viager, pointing out obvious areas such as automated control of fill levels or contaminants. More recent opportunities also exist:

"Issues like bottle deformities or packaging inconsistencies can now be detected with smart cameras that integrate AI directly, significantly reducing the entry cost and complexity”, he adds.

Alan Mitchell, Director of Operations at International Beverage, reinforces these points: "We’re seeing a real opportunity to automate – both to increase bottling capacity, improve safety, and to meet the higher quality standards required for our premium products."

Overcoming barriers to further automation

Despite these compelling opportunities, many UK distillers remain hesitant due to perceived barriers such as high upfront capital costs and limited internal expertise.

Søren Peters, Co-CEO at HowToRobot, emphasizes that the capital investment hurdle is significant but manageable. "High upfront costs have previously been daunting, particularly for smaller firms. However, today's financing options, such as leasing arrangements that convert capital expenditure into manageable monthly operational expenses, dramatically lower entry barriers. This directly alleviates financial strain by spreading costs and enabling immediate efficiency gains."

Another common obstacle is the technical expertise required to select, implement, and operate automation solutions effectively. "Many companies simply don't have the bandwidth or in-house skills to manage automation independently," Peters notes. "This gap is increasingly bridged by external specialists, sourcing platforms such as HowToRobot and integrators who can handle the heavy lifting, making automation accessible even to smaller players."

With many distilleries already struggling to recruit skilled staff, automation is less about replacing jobs and more about ensuring limited expertise is used where it creates the most value, while machines take over repetitive and physically demanding tasks.

According to Peters, an increasing number of spirits producers are actively seeking guidance and solutions: "We are seeing growing demand from spirits producers looking to identify what to automate and how to find solutions that best address the cost, capacity, and quality needs of the business.”

A critical juncture for UK distillers

For UK distilleries, embracing automation at this juncture could mean the difference between stagnation and sustainable growth. The technology is ready and accessible, even for smaller enterprises previously hesitant to commit.

As cost pressures intensify, automation offers a clear path forward, ensuring the UK spirits industry remains resilient and globally competitive.

"The benefits extend beyond mere cost savings," Peters concludes. "Automation enhances consistency, reduces risks, and ultimately secures long-term competitiveness. The question for distilleries today isn't whether to automate but how quickly they can leverage these opportunities."