CHINA has brought its fair share of ups and downs for the Scotch whisky industry in the last decade.

Less than a decade ago, the export potential for Scotch in the world’s second biggest economy was one of the main reasons Diageo unleashed a £1 billion, five-year plan to ramp up its production capacity. This included investment in the brand new Roseisle Distillery in Speyside – a move almost unheard of for a sector blighted by over-capacity in the past.

Five years later, the outlook in China was very different. Austerity measures phased in by the Chinese state, bringing an end to the culture of conspicuous gift giving to officials, brought a sudden decline in sales, not just of luxury Scotch but Cognac too.

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It has been a slow process of recovery for Scotch in China since, but there are grounds for optimism now. Diageo, which leads its sales drive in China with Johnnie Walker, was bullish about its prospects yesterday, with European president John Kennedy stating it is now starting to see the benefit of sustained efforts to build distribution networks and the visibility of its brands. Rival distiller Pernod Ricard has spotted signs of revival as well, having highlighted rebounding sales in the market before Christmas.

With more and more consumers entering the Scotch category, too, the days of crisis may just be over for whisky in China.