Edinburgh-based Artisanal Spirits Company (ASC), owner of the Scotch Malt Whisky Society (SMWS), said on Thursday the recent government shutdown in the US “has created a substantial backlog in the regulatory approval of new product labels” that affects $3.2 million of SMWS America shipments.
Artisanal Spirits shares fell about 14%.
Artisanal Spirits said: “The recent government shutdown in the US has created a substantial backlog in the regulatory approval of new product labels, which is currently quoted by the US Government Alcohol and Tobacco Tax and Trade Bureau (TTB) to be in excess of six weeks versus the normal 72 hour process under which the SMWS has successfully operated for the past 30+ years.
“This directly impacts SMWS due to the unique model of the Society’s limited-edition whiskies whereby each new bottle sold in the US requires a Certificate of Label Approval (COLA).
“As a result, the $3.2m of SMWS America shipments which were due to ship in November 2025, will be unable to clear US customs before the end of the year, due to the 100+ outstanding COLAs which are not expected to be issued until 2026.
“These planned shipments would have taken full year SMWS America revenue to £4.2m, in line with both the average shipments and in-market sales for FY21-FY24 (£4.2m).
“These circumstances are entirely outside of the company’s control and will have a non-cash impact on the reported results for FY25 of c.£2.5m of revenue and c.£2m of EBITDA.
“However, importantly, this will have no impact on in-market operations, where depletions in Q4-25 to date have returned to single digit growth following the decline experienced in the previous 12 months.”
Artisanal Spirits Company CEO Andrew Dane said: “The company had made good progress on the production and logistics required to deliver our full year US shipment plan.
“It is therefore highly frustrating that this development – which is outside the company’s control, will have an adverse effect on our reported results, albeit this is a non-cash impact and not a reflection of underlying trading levels.
“The US is the world’s largest market for Scotch Malt Whisky and while the market has been challenging over the last 12 months, the management actions implemented at the start of this year have been successful, momentum is improving and the US remains the largest longer-term strategic opportunity for the business.
“Hence, we have taken the decision to leverage the opportunity presented by the impact of the recent US government shutdown to accelerate the next stage of our strategic development in this market.”
The company added: “It has been our strategy to take more direct management of our US operations over time, reducing costs and improving performance in the world’s largest market for Scotch Malt Whisky.
“We have already made progress on this path, with phase one successfully implemented in the market earlier this year. This delivered recurring annual savings of around $0.5m per year and gave us direct operational control of the marketing and operations team in the US.
“The next stage of this strategy is to move to an improved in-country route to market, with direct relationships with US ‘3-tier’ partners which will deliver substantial recurring cost and efficiency benefits. To make this change, we need to transition the in-market stock from our legacy partner into the new model.
“We have decided to accelerate this move, as the TTB impact means that the stocks held by our existing partner will be significantly reduced, making a transition to this new route-to-market at the end of March 2026 (when the current contract expires) simpler and more efficient to execute.
“This means that in addition to the impact of the two FY25 shipments that had been scheduled for November 2025 noted above, there will be a further non-recurring, non-cash accounting impact of c$2-2.5m of revenue and c.£1-£1.5m EBITDA in FY25, reflecting the stock that is currently in market and is expected to still be held by our existing importer as at 31 December 2025.
“As a result, the total combined non-recurring, non-cash revenue impact in FY25 is expected to be £4-4.5m. The non-recurring, non-cash EBITDA impact in FY25 is expected to be c£3-£3.5m.
“Importantly, the underlying performance of the remainder of the business continues to deliver in line with current market expectations.”