A preferential treatment for the Highlands
Special measures were taken in favour of the Highlands, partially to compensate the consequences of the food shortage. The idea was to encourage the small moonshine distilleries to become legal ones. The law determined a maximum size for the stills, and just authorized the use of local barley, and as a compensation, the level of the taxes was sensibly reduced. The tax on the malt has even been suppressed. On the other hand, any infraction would be severely repressed, and the landlords were considered as responsible for offences by the people living on their estates.
The latest measure made the landlords very angry. The Lowlands producers said this was discrimination, as they did not benefit from preferential measures. This protest actions obliged the government to take some new measures in 1785. Any export of Highland whisky has been prohibited outside the Highlands, and the responsibility of the landlords has been suppressed in case of infractions by their people.
A new outbreak of moonshine spirit
The export prohibition made to the Highland whiskies (which quality was much higher than in the Lowlands), gave a second life to smuggling.
The main difference between whisky from the Highlands and Lowlands came from the shape of the stills. The stills in the Highlands were better shaped to produce quality spirit.
At the beginning of the industrial revolution, the distilleries belonging to the Stein and Haig were the biggest industrial plants in Scotland.
The huge production increase and the export to England was considered by the rich London gin merchants as a very bad news, and they began to fight against the growing importance of Scottish whisky. An implacable price war began between the gin and the whisky producers. The whisky producers were obliged to sell their whisky under the cost price.
Another consequence of the actions by the gin merchants lobby was an increase of the taxes on the Scottish spirit. This just affected the Lowlands whisky, as the Highlands could not be exported, due to the export prohibition.
The reaction of the Lowlands industry against the sudden increase of their production costs was a technologic move, making faster production possible for less money. It is obvious that such a move could not have beneficial effects on the quality of the Lowlands whisky.
Another reaction was an increase of the Highland whiskies prices, due to the supply and demand economical law, even if the whole business was only based on smuggling, as the Highlands whisky could not be exported.
The economical importance of whisky in Scotland dates back to this period, which was the beginning of the capitalist era. In those days already, whisky was the major industry in the country.