Harris distillery offered Scottish government help

Isle of Harris Distillery is reducing its production and workforce as part of a restructuring programme

The Scottish government says it will "do everything it can" to help Isle of Harris Distillery and its workers after the company announced redundancies.

The maker of Isle of Harris Gin and single malt whiskies employs 50 people.

Managing director Simon Erlanger said the spirits industry was facing "challenging headwinds" and having to make difficult decisions.

Business Minister Richard Lochhead said the Scottish government was paying close attention to the situation and working with the Western Isles-based company.

The Moray SNP MSP told BBC Scotland News "volatility in the global market" had impacted on commercial decision-making in the whisky industry.

But he said the Scottish government was confident the market would "pick up" in the future.

Its development agency Highlands and Islands Enterprise (HIE) has asked Isle of Harris Distillery for clarity on its situation, and its implications for the workforce.

Ministers said redundancy initiative - Partnership Action for Continuing Employment (PACE) - was also ready to offer free advice and support to people affected.

Isle of Harris Distillery said it welcomed any further government support.

It said it was supporting staff who had applied for voluntary redundancy to secure future employment.

'Deeply regrettable'

In April, Isle of Harris Distillery said it would reduce its production and workforce as part of a restructuring programme.

It is not known how many redundancies have been sought.

The distillery opened in 2015 with just 10 employees.

Scotland's whisky industry previously warned tariffs imposed by the US - its most important overseas market - would be a "huge blow".

Last week, the UK and US governments reached a deal on some areas of international trade, but President Donald Trump's blanket 10% tax on imports still applies to most goods entering the US.

Distillery managing director Simon Erlanger said restructuring was needed to safeguard the future of the business.

He said voluntary redundancy was being offered to staff following cost-cutting measures, with compulsory redundancy to follow if reduction targets were not met.

Mr Erlanger said the move was "deeply regrettable", adding that the distillery represented more than £20m investment in the island's economy.

Last week, trade body The Scotch Whisky Association described a UK-India deal, which would half tariffs on gin and whisky, as a landmark moment for the industry.

In 2022, the Harris distillery secured £10m in funding from HSBC to pay for a new export drive to distribute its gin to more than 20 markets around the world.

They includes the US, Canada, France and Germany.