In 1985 a visitor to Islay would have found an island whose principal industry was in retreat. Port Ellen had closed in 1983 and would not reopen. Ardbeg had stopped distilling in 1981. Bruichladdich was running intermittently and would be mothballed within a decade. Bunnahabhain and Caol Ila were producing almost entirely for blends. Laphroaig, Lagavulin and Bowmore were working but unglamorous, their single malts curiosities for a small band of enthusiasts who liked whisky that tasted of hospitals. Peat was unfashionable. The industry was in the middle of the Whisky Loch, and Islay — remote, expensive to operate, making a style few people wanted — looked like the place most likely to lose.
Forty years later the island has ten working distilleries, several more under construction or in planning, a festival that fills every bed for a week each May, and a global following that treats a bottle of Ardbeg or Lagavulin as a badge of identity. The reversal is the most complete in modern Scotch. Here is how it happened.
The low point
The 1980s closures hit Islay hard. Port Ellen’s shutdown cost the island’s largest village a substantial share of its jobs, and Ardbeg’s silence left a famous name with no whisky being made. The owners’ logic was sound by the standards of the time: blends needed less heavily peated malt than they had, Caol Ila and Lagavulin could supply what was needed, and the smaller sites were uneconomic. Nobody at the big companies anticipated that peat would become the most desirable flavour in whisky.
The Islay region page maps the island as it was and is; our peat guide explains what the flavour is and why it is so divisive.
The Classic Malts
The first signal of change came from the company that had done the closing. In 1988 United Distillers, the successor to DCL, launched the Classic Malts: six single malts chosen to represent Scotland’s regions, marketed together with serious investment. Lagavulin 16 was the Islay representative, and its selection — a heavily peated, sixteen-year-old malt that had barely been sold as a single before — put a smoky whisky in front of the world’s bars and duty-free shops for the first time. It worked. By the mid-1990s Lagavulin was short of stock, which has been a recurring condition since. The Lagavulin page tells the story.
Ardbeg’s resurrection
The second signal came in 1997, when Glenmorangie bought Ardbeg from Allied Distillers for £7 million — a sum that now looks like a rounding error — and set about restoring a distillery that had been barely working for sixteen years. The company’s whisky-maker, Bill Lumsden, rebuilt the range from the surviving stock, launched a 10 Year Old in 2000, and created a Committee of devotees who bought everything the distillery released and told everyone they knew. Uigeadail followed in 2003 and was named whisky of the year by a prominent critic; Corryvreckan in 2008. LVMH, which bought Glenmorangie in 2004, poured money into the brand. By the 2010s Ardbeg was a cult, with a new still house (2019) to meet demand that the old one could not. The Ardbeg page has the full account.
Bruichladdich’s reinvention
The third came in 2001, when a group led by the wine merchant Mark Reynier bought the mothballed Bruichladdich and reopened it with Jim McEwan, formerly of Bowmore, as distiller. Bruichladdich positioned itself as Islay’s rebel: unpeated whisky with an emphasis on barley provenance, a heavily peated Port Charlotte, and the absurdly peated Octomore, released in annual editions at phenol levels no one had attempted. It bottled at higher strengths, without colouring or chill filtration, with full transparency about casks, and it talked constantly. Rémy Cointreau bought it in 2012 for £58 million. The Bruichladdich page covers the whole arc.
The newcomers
Kilchoman, founded in 2005 by Anthony Wills on a farm in the north-west, was the first new Islay distillery since 1881 and the first to prove that a small independent could make it on the island. It grows some of its own barley, floor-malts it, and sells a young, bright, peated whisky that found a market immediately. The Kilchoman page has the story. Ardnahoe followed in 2018, built by the independent bottler Hunter Laing. And in 2024 Diageo reopened Port Ellen — the distillery whose closure had symbolised the low point — with stills rebuilt from the original drawings and a visitor centre designed to cope with pilgrims. The Port Ellen page covers the closure, the cult and the return.
Portintruan, being built by Elixir Distillers on the road out of Port Ellen, and further proposed sites would take the island past a dozen. Every established distillery has expanded: Caol Ila in 2011, Laphroaig, Bowmore and Bunnahabhain in the 2010s, Ardbeg in 2019.
The secondary market
Nowhere is the boom more visible than at auction. Through the 1990s, a bottle of 1970s Port Ellen could be bought for the price of a decent dinner; by the 2010s the same bottle sold for thousands, and Diageo’s annual Port Ellen releases, priced in the hundreds at launch, changed hands for multiples within weeks. Ardbeg’s Committee releases, Bruichladdich’s early Octomores, Lagavulin’s Fèis Ìle bottlings and Kilchoman’s first single casks all acquired secondary values that bore no relation to the liquid. The island’s distilleries, which had been releasing limited editions to reward loyal drinkers, found they had created a market for speculators, and several have since restricted sales, introduced ballots and raised launch prices to capture value that was going to resellers. The effect on the ordinary drinker has been that the most interesting Islay whisky is now the hardest to buy at retail, which was not what the cult of the 1990s had in mind.
Why peat came back
Several forces. The single malt boom of the 2000s rewarded distinctiveness, and nothing is more distinctive than Islay. A generation of drinkers raised on strong flavours — hoppy beer, espresso, chilli — found peat appealing rather than off-putting. The internet made the island’s small band of enthusiasts into a global community, and that community’s enthusiasm, amplified by festival bottlings and limited editions, produced the collector’s market described in our how to build a collection guide. And the big companies, having nearly killed the category, discovered that scarcity sells: a Lagavulin that is always slightly short of stock is worth more than one that is not.
What it has done to the island
Islay has about 3,200 permanent residents and receives tens of thousands of whisky tourists a year. The distilleries are the largest employers and the reason the ferry is full. Housing has become scarce and expensive as holiday lets multiply. Fèis Ìle, the festival that began in 1986 as a modest celebration of Gaelic culture, is now a week-long whisky event that dominates the island’s calendar. Port Ellen village has a rebuilt distillery and new jobs; it also has traffic. The peat bogs that supply the maltings are a finite resource managed under increasing scrutiny, and the distilleries’ water and energy demands are a live political issue. The boom has been, on balance, a transformation that most islanders would not reverse, and one that has raised questions the industry is still answering.
The whisky itself
Through all of it, the whisky has stayed recognisably what it was. Lagavulin 16 is still Lagavulin 16. Laphroaig 10 still tastes of iodine. The new distilleries have added range — Kilchoman’s youth, Bruichladdich’s variety, Ardnahoe’s heavy worm-tub spirit — without diluting the island’s identity. Our tasting notes on the island’s distilleries are collected in the reviews as we publish them, and the whisky suggests that, for all the hype, the island earned it. In 1985 that would have seemed unlikely. It is the best argument in Scotch that a style can be written off and come back.
