Port Ellen: Scotland’s Unluckiest Lost Distillery

Port Ellen: Scotland’s Unluckiest Lost Distillery

Today considered one of Scotland’s greatest “silent distilleries”, the stills finally fell quiet at Port Ellen in 1983. Set on Islay’s windswept southern shore, this iconic lost distillery was founded in 1825 by the unlucky Alexander Ker Mackay who went bankrupt soon after the opening. Fortunately for whisky connoisseurs, the project was taken over by sharp young businessman John Ramsay who recognised the potential of the fledgling Scotch whisky market.

Ramsay was one of the first to start exporting Scotch to the USA, shipping the whisky directly from Port Ellen to the East Coast. The trade brought economic benefits for the whole region, with Ramsay extending Islay’s pier in 1881 to ship even more whisky. Business was booming for Port Ellen, enabling Ramsay to build his own Islay whisky empire by purchasing the Ardbeg, Lagavulin, Laphroaig and Ardenistiel distilleries.

Bad luck struck again in the 20th century as the transatlantic Scotch whisky trade was hit hard by post-war blues and the Great Depression. In 1930 the distillery was mothballed and the stills fell silent for 37 years. Another lease of life came in 1967 when growing interest in Scotch led to a £400,000 renovation project. Sadly this second chance was short-lived with an oversaturated market for Scotch forcing the distillery to close once more in the 1980s. 

Although it might seem like a tragic tale, the closure of Port Ellen has in fact caused sales to boom on the secondary market. Collectors from Hong Kong to the United States vie to acquire cult bottles against a backdrop of rapidly-dwindling supply. Many Port Ellen bottles are now extremely rare and frequently change hands for high four-figure sums. 

Investors lucky enough to snap up rare releases from the very few remaining casks of Port Ellen can expect to reap rich rewards. Rare Whisky 101’s Port Ellen Index which includes all official releases shows an 145% increase in value since the index was rebased in 2012. More recently, the index has jumped 24.2% over the past 12 months despite the economic uncertainty surrounding the Covid-19 pandemic.

In 2017 Port Ellen’s mythical status got another boost when Diageo announced intentions to reopen the long-lost distillery. The opening was initially scheduled for 2020, but this has now been provisionally pushed back to 2021 thanks to a combination of Covid-19, Brexit and U.S. tariff concerns. The resurrection project will require extensive rebuilding since most of it was demolished and dismantled in the 1930s and again in the 80s. 

Whisky connoisseurs will have to wait a bit longer to get their hands on the first releases from the resurrected Port Ellen distillery. Diageo expects to release its first new Port Ellen whiskies in the early 2030s. Until then those lucky enough to own a bottle from this legendary lost distillery should consider themselves very fortunate indeed.