Regulating Globally, Acting ‘Territorially’:

The rise and fall of a ‘Scottish Scotch Whisky Act’

Andy Smith

SPIRIT-Sciences Po Bordeaux

a.smith@sciencespobordeaux.fr

Paper presented to ECPR workshop Regions as ‘spaces’ for politics’:

Analyzing change through new paradigms, Rennes, April 11-16th, 2008.

NB. Research in progress. Do not cite without permission.

Introduction

As a plethora of research has shown, at least since devolution, Scotland is undoubtedly a space

for politics (Bulmer et al., 2002; Keating, 2005). However, it is much less clear what, if anything,

this means for the private, collective and public actors who are engaged on a daily basis in the

regulation of their respective industries. Have their repertoires of action and standard operating

modes been modified? Has this resulted in shifts in the distribution of power? In short, what has

changed, how and why?

Using ongoing research from a case study of one such industry –Scotch whisky- this paper

attempts to shed light on these questions by examining how a territory becomes, or remains, a

genuine space for politics when its actors not only create networks ‘at home’, but also foster

durable connections with external sites of regulatory decision-making. Moreover, I seek to

discover whether, within these sites, representations of territory are vital resources which

determine not only policy choices, but also durable ‘assignments’ of the authority to even be

involved in such processes (Carter and Smith, 2008). In short, I set out to show that, at least

within manufacturing industries, regulating globally is inseparable from ‘acting territorially’. In

order to expand upon and substantiate this claim, the paper proceeds in two stages.

First, it develops an approach to the regulation of industries which obliges research to take into

account the role of territory. Building upon institutionalist premises and concepts drawn from

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public policy analysis, industrial economics and constructivist political sociology, an analytical

framework will be set out which seeks to capture the intertwined nature of phenomena too often

treated as either ‘economic’ or ‘political’. In particular, attention will be focused upon what I call

the ‘global political work’ involved in the regulation of contemporary industries and the usages of

territory this entails.

The second part of the paper applies this grid to a case study of the Scotch Whisky industry’s

relationship to territory. More precisely, this section concentrates upon a particular episode in the

history of this industry which, in 2003, concerned the devising of plans for a Scottish Scotch

Whisky Act but also, four years later, their eventual withdrawl in favour of a UK statutory

instrument. Tracing this process of problem shaping, policy formulation, agenda-setting and

legislative adoption enables us to illustrate general hypotheses about global political work in the

regulation of industries, the role territory plays therein and, consequently, patterns of

contemporary spaces for politics.

In summary, this paper attempts to contribute to the workshop’s aims -theoretical development

and the generation of new knowledge about regions- through developing an approach to the

relationship between ‘regions’, the regulation of industries and territory, and then applying it to

the analysis of a specific longitudinal series of political processes that have occurred in and

around the Scotch Whisky industry.

1. Studying Industry-Territory Relations: An Analytical Framework

Different parts of the social sciences have examined and theorized the relationship between

industries and geographical or political space for decades (Itçaina, Palard, Ségas, 2007).

Notwithstanding the qualities of these contributions, this relationship has usually been defined in

vague ways which are frequently the result of superficial inter-disciplinary co-operation and

exchange. Instead, research needs analytical approaches that have been built progressively using

theoretically sound ‘building blocks’. The approach developed here is based on two successive

stages. First, it is vitally important to identify with precision the role of politics in industry in

general. Second, one needs to identify the role played by territory therein and the research design

and hypotheses this implies.

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1.1 The Politics of Industry: A Generic Approach

The neo-classical economics so prevalent in Western societies incites most commentators of

productive and commercial activities to explain them in terms of ‘markets’ driven by ‘supply’,

‘demand’ and ‘price’. However, institutionalist research has convincingly shown that these

functional issues neither emerge spontaneously from social interaction, nor do they play out

within an anarchical Hobbesian world where uncertainty and coercion always prevail (Fligstein,

1996; Boyer, 2004). Instead, productive and commercial activity invariably takes place within

spaces that have been organized and regulated through systems of rules institutionalized by

identifiable actors. More precisely, these private, collective and public actors have sought to

‘regularize’ their respective spaces of interaction through constructing institutions which not only

place constraints upon actor behaviour, but also provide the very conditions under which this

behaviour can durably take place. Consequently, if the sustainability of the institutions which

structure the activity of firms is of course linked to functional issues (ie. designing, producing and

selling goods or services), their durability is always a political construction that plays out through

a constant process of institutionalization (institution building), deinstitutionalization (the

contesting of institutions) and reinstitutionalization. Drawing heavily upon work conducted with

an economist, Bernard Jullien (Jullien and Smith, 2008a, b and c), this section first further defines

industries as a field of research before setting out a means of studying processes of change

around the concept of political work.

Defining Industries: Institutionalized Relationships, Institutional Orders and Trans-Industry Regulation

As stated above, our approach does not define its field of study around markets. Neither,

however, does it simply adopt the concept generally used in political science to study public

policy-making: the sector. Instead, the challenge is to define the object of research around a space

of actors which includes both the producers, processors and sellers of a product or a service

(competitors) and the collective or public actors who claim to represent and/or reglement them

(stakeholders). For this reason we have resuscitated the term industry to encompass the whole range

of competitive and reglementary interactions which has emerged around each set of productive

and commercial activity. More precisely, we have sought to define Industry as a concept in three

stages: first in terms of the Institutionalized Relationships it contains, second around the Institutional

Order these give rise to and third through its interdependence with Trans-Industry regulation.

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Over time, each industry has emerged through the simultaneous development of four sets of

constraints and opportunities which in turn have generated four Institutionalized Relationships (IRs).

Devized through the interactions and interdependencies that link competitors and stakeholders,

these ‘spaces for politics’ concern employment, production, finance and sales (see Figure 1).

- An industry’s Employment IR regulates its employer-employee relations. Beyond

employment law, this space includes wider practices commonly labelled ‘industrial

relations’;

- A Purchase IR regulates interactions between the firms involved in producing an industry’s

goods or services. In particular, this is the space where rules concerning production and

processing are set and implemented;

- An industry’s Finance IR regulates how its competitors manage their respective capital

investments and operating costs. Banking and stock market institutions are central here;

- Finally, an industry’s Commercial IR brings together the institutions that set conditions

upon the marketing and selling of its goods or services. Here relations between

producers, wholesalers and retailers are crucial.

Figure 1: An Industry as a set of four Institutionalized Relationships

An industry as a configuration of the four IRs which defines:

- the product or service - professional identities

IR n°1 Employment Relationship

IR n°2Purchase Relationship

IR n°3 Financial Relationship IR n°4

Commercial Relationship

Other than focusing attention upon the constant interplay between competitor and stakeholder

behaviour, this first step towards the conceptualization of industries forces research to be centred

upon where and how attempts to maintain stasis or induce change take place. Each of these four

relationships is embodied by spaces of actors, rules and expectations within which most struggles

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for and against change are fought out. At least in the case of today, however, it is highly unlikely

that each of these spaces will be regulated at the same territorial scale. Eg. the Finance IR may be

regulated at the scale of the EU whereas the Commercial IR may straddle regional, national, EU

and even WTO scalings.

Notwithstanding the importance of IRs as spaces for politics, the second step towards

conceptualizing industries entails envisaging them also as complete Institutional Orders (IOs) of

these four relationships. As Figure 1 attempts to visualize, despite the energy and resources

committed to regulating its IRs, each industry possesses a ‘centre’ around or through which

certain industry-wide issues are debated and framed. In some cases, this centre corresponds with

an identifiable and durable configuration of actors. In others, the centre is a more temporary,

sometimes even fleeting, meeting place. But in all instances the centre of an industry does

provide a space for political action whereby attempts are made to articulate its IRs and, in so

doing, update the commonly held intersubjective meanings of the industries products, services

and professional identities. In short, if most regulation takes place IR by IR, an industry as a

whole nevertheless engenders a combination of institutions and an identity (its ‘industry-ness’).

This point is particularly important when one builds a third and final stage into the

conceptualization of industries: the role of trans-industry regulation (TIR). Until now, social science

has generally defined the relationship between specific industries and over-arching spheres of

regulation in terms of ‘macro-meso’ (Boyer, 2004) or ‘global-sectoral’ (Jobert and Muller, 1987)

relations. There are two problems with such definitions. First, they have generally described the

‘macro’ or the ‘global’ in abstract and disincarnated terms. Second, they have tended to assume

that these definitions correspond neatly with the scale of the nation-state (Carter and Smith,

2008). By examining in depth how, either through IRs or the centre of the IO, the spaces for

politics within industries are linked to horizontal trans-industry spaces, our conceptualization

enables research to overcome both these problems. Indeed, it is through generating knowledge

about which actors within an industry are engaged in extra-industry mediations, eg. around EU

Competition policy, that one is best equipped to ascertain the scaling of both industry-specific

and trans-industry regulation.

In summary, being serious about analyzing the politics of productive and commercial activity

means adopting a conceptualization of industry which facilitates the unpacking of phenomena

located within and between IRs, IOs and trans-industry regulation. In order to then go on and

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study the emergence and change of these phenomena, a second concept needs developing:

political work.

Defining the Object of Research: Political Work

Drawing upon constructivist and reticular ontologies, we define political work as the confluence of

two constant processes during which the composition of actor alliances and the political

construction of ‘economic reality’ take place: the transformation of industrial issues into

collective and public ‘problems’ and their politicization. These points will be briefly illustrated

with introductory remarks about our case study of Scotch Whisky.

The Problematization of ‘Challenges’ for the Regulation of Industry

Contrary to functionalist theory, ‘industrial difficulties’ do not arise spontaneously from social

conflict or technologically innovation and then automatically or mechanically become objects of

collective or public intervention. In reality, an industrial difficulty only engenders such action

through undergoing a process of problematization (Callon, 1986). In order to study this process, it

is useful to distinguish between different stages of a form of political work which defines,

institutionalizes and legitimizes industrial controversies.

On a day to day basis, companies in an industry such as Scotch Whisky work within sets of

‘conditions’ which include transport costs, health and safety law, employment and tax law etc. As

long as representatives of these companies do not seek to change these conditions they remain

‘flat’ and unproblematized (Kingdon, 1984). Seen from the angle of an industry’s Institutionalized

Relationships, in such circumstances employment, purchasing, finance, and commerce are

subjects with which actors within companies engage by adopting a logic of action that is

essentially mono-organisational and commercially-centred. However, as soon as such actors seek

to modify their conditions, they attempt to transform them into ‘problems’ of three types:

- collective action problems emerge whenever their definition is shared by an inter-

organisational grouping of actors who can claim to be representative of their industry

and/or their profession. In our case study the Scotch Whisky Association (SWA) is the

cornerstone of this collective action. Indeed, much of the regulation of industry takes

place around struggles to define problems and strategies within this body;

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- public problems develop when the process of definition widens to include politicians and

civil servants who, at least in theory, are supposed to work for the public interest

(Padioleau, 1982, 25). Indeed, the formulation of public problems constitutes an

indispensable step in both agenda setting (Rochefort and Cobb, 1994) and the

formulation of public policy instruments (Lascoumes et Le Galès, 2007);

- Finally, as we set out below, public problems can also become politicized problems.

Politicization and Depoliticization as Strategies of Legitimization

Be they collective or public, the problems which structure the organization and the regulation of

an industry are never intrinsically ‘political’ or ‘technical’. Rather either of these labels is attached

to them over the course of the interactions which give rise to their definition and regulation

(Dubois and Dulong, 1999; Lagroye, 2003a). Politicization is thus a form of political work that

needs to be studied from an angle that is simultaneously constructivist and relational.

A constructivist perspective is necessary because one of the fundamental aims of research into

the politics of industry must be to understand the registers of legitimization and the types of

dramatization used to define an issue as ‘political’. Here politicization occurs when actors

explicitly employ values either to transform the meaning of an issue or in order to transfer its

treatment to another site of negotiation. For example, representatives of many food and drink

industries often argue for support from public authorities by highlighting their respective roots in

the ‘traditions’ of a local community. In addition to presenting such discourse in and around

decision-making arenas, mediatization can also be used to attain such ends. In many cases the aim

of politicization is, quite straightforwardly, ‘to inscribe a problem on the list of issues treated by

politicians’, thereby ‘enrolling’ them (Lagroye, 2003b, 367). In others, the aim is more generally to

enable actors to go beyond the limits of each industry (Lagroye, 2003b, 356) in order to influence

trans-industry policy issues such as competition law.

Importantly, when studying politicization it is also just as necessary to analyze its apparent

opposite: depoliticization. Often called ‘technicization’, depoliticization is a type of political work

which downplays values in favour of arguments based upon ‘expertise’ and ‘efficiency’ (Radaelli,

1999). Although superficially this may appear contradictory, from an analytical point of view it is

therefore vitally important to consider that strategies of legitimization based upon depoliticization

are highly political.

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Our constructivist definition of politicization is also relational in order to take into account the

entire spectrum of actors who participate in this process. If researchers, particularly political

scientists, are often tempted to think that certain actors, notably politicians, are always better

positioned than others to be the ‘entrepreneurs of politicization’ (Arnaud and Guionnet, 2005,

17), empirical research invariably uncovers a wider range of protagonists. Indeed, it is important

to underline that politicization does not take place outside the web of interdependencies which lie

at the heart of the organization and regulation of an industry. On the contrary, politicization is a

tool of political work which is generally deliberately employed in order to modify the state of

such dependence.

In summary, the concept of political work encourages the analysis of politics within industries as

a highly structured configuration of processes, relations, representations and expectations which

is endogenous to each Institutional Order, rather than as a random range of ‘exogenous factors’

which somehow make up its ‘context’ or ‘environment’. Consequently, the claim made here is

that political work is not only omnipresent in the regulation of industries; it is its very cause.

Figure 2: A framework for the analysis of political work within the regulation of industries

Construction of arguments

- economic, legal and political ‘aims’

- collective or public theories of action

- symbolic evocation

Composition of alliances

- industrial communities

- extraindustry networks

Activation of arguments and alliances through:

- problematization

- politicization or technicization

- multipositionality et omnipresence

Institutions: rules, norms and expectations

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1.2 Territory and the Institutionalization of Industries: Problematics and Hypotheses

The framework outlined above provides a generic means of studying what we call the Politics of

Industry (Jullien and Smith, 2008c). As we have underlined, the perpetual institutionalization of

each industry can best be grasped by analyzing the political work which causes and drives it. We

now explore an omnipresent and central feature of the problematizations and the politicisations

that constitute this work: usages of territory. Drawing heavily upon previous analyses developed

with Caitríona Carter (Carter and Smith 2007 and 2008), and my own recent reflections (Smith,

2008), here we first propose a set of theoretical reasons for studying territory in this way, then

draw consequences from this in the shape of hypotheses and research design.

Theorizing the Territory-Institutionalization-Legitimization triangle

The fundamental theoretical reason we claim that territory is an omnipresent variable in political

work (Carter and Smith, 2008: 267) stems from its role in the building and legitimization of

institutions. As shown above, institutionalization of an industry’s Commercial IR, for example, is

only complete if it has been legitimized. Expressed in formulaic terms:

Institutions > delegitimization + territory > relegitimization + territory = reinstitutionalization

More precisely, social representations of territory and their political instrumentalization play the

following three roles in the political work entailed in the regulation of any industry.

First, and most obviously, territory can provide formal legitimacy to public and collective actors.

Institutionalized Relationships (IRs), Institutional Orders (IOs) and Trans-Industry regulation

(TIR) all have boundaries which in part are defined in relation to geographically limited areas.

These territories are therefore part and parcel of the formal legitimacy of actors to take political

action, be this to legislate (eg. Scottish ministers), to take final decisions (eg. the Council of the

Scotch Whisky Association), or simply to represent. As will be highlighted in our case study,

formal legitimacies are not necessarily always activated. Nevertheless, they certainly provide latent

political resources and, conversely, constraints which analysis clearly must take into account.

Second, territory is a constant consideration whenever an actor’s interests are being defined and

their preferences established. Here social science, and International Relations in particular, has

tended to focus principally upon usages of territory in the interest and preference formation of

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states or regional authorities (Moravscik, 1998; Burch and Gomez, 2002). In the case of industries

such as whisky or wine (Smith, de Maillard, Costa, 2007), however, our research strongly suggests

that well before public actors become involved, territory is already a crucial variable for

understanding how and why firms and collective action bodies define their ‘interests’ and

‘preferences’. Territory plays an initial role here in the ‘decoding’ of an industry’s difficulties and

challenges. But it is also just as important to the ‘recoding’ of these issues into proposals for

collective and/or public action (Muller, 1995). In certain cases, the influence of territory may

encourage or facilitate intersubjective sharing of representations and thus constitute a ‘cultural’ or

‘proximity’-driven process. However, it is generally more likely that territory’s role in interest

formation will be played out around, and oriented by, the boundaries specific to a collective

action group such as the Scotch Whisky Association.

Finally, this point on interest and preference formation spills over into how actors seek to make

these representations of reality ‘shared’ by others so as to win out within the political spaces

concerned. During this process of interest aggregation and articulation, territory once again plays

a central role. This is because within any space for politics, be it an IR an IO or its articulations

with TIR, acting for or speaking in the name of ‘the general interest’, and therefore of a territory,

constitutes a powerful weapon for legitimizing one’s point of view. The power of this rhetoric

stems from how territory can ‘condense’ symbols (Braud, 1996; Abélès, 1989) into a form of

argumentation with which to counter other arguments couched either in the technocratic register

of ‘efficiency’ or the professional register of ‘the sector’. As many studies have shown, the

political impact of ‘efficiency’ based legitimizations is generally only temporary because they lack

social depth and resonance (Lagroye, 1985; Radaelli, 1999). Moreover, at least in industries,

‘efficiency’ is constantly contested (Jullien and Smith, 2008a). Legitimizations in terms of ‘the

sectoral interest’, or that of a profession, can have longer lasting effects but always run the risk of

being inverted into the stigma of ‘corporatist interests’. The ‘general interest’, however,

particularly when allied to territory, provides a wide variety of legitimizations which, for cognitive

and emotive reasons, can often be used to ‘trump’ other forms of argumentation. Indeed,

politicization is very often undertaken primarily around evocations of ‘the general interest’

(Dulong, 1997).

In summary, when combined these three reasons provide a solid basis from which to theorize

about the crucial importance of territory within the legitimization, and therefore the

institutionalisation, of an industry’s regulation. Territory is thus a resource for maintaining or

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changing representations of industrial ‘reality’ and, consequently, reproducing or

reinstitutionalizing spaces for politics

Research design and hypotheses

The next challenge for research is to translate this conceptualization of the role of territory in the

politics of industry into an operationalizable research design capable of elucidating political work.

In order to capture and unpack the processes of problematization and politicisation which

structure this phenomena, two stages of research need to be undertaken (Jullien and Smith,

2008b).

Essentially structuralist in character, the first entails identification of what representatives of the

industry itself present as its ‘parameters’ and ‘issues’. Statistics, official documentation, public

speeches and the specialized press provide information on these points. The objective of this

stage is twofold. First, to begin to map the industry in turns of its IRs, its IO and any evidence of

TIR. Second, to identify changes, debates or conflicts around which political work has appeared

to take place. During both these investigations, usages of territory must obviously be noted and

reflected upon.

Fundamentally constructivist and sourced heavily by interviews prepared by the above, the

second stage of research entails process tracing the combination of argumentation and alliance-

building through which problematisation and politicisation transit. More precisely the aim of

research here is to elucidate the spaces for politics observed, and the role played by territory

therein, by simultaneously:

- reconstituting the objectives of each actor over time, their values, their theories of action,

their logic of action and the symbols which, explicitly or implicitly, accompany their

argumentation;

- mapping actor interaction, interdependence and hierarchy.

To ensure these research questions are integrated, two generic hypotheses need testing:

- in order for a territory to become (or remain) a genuine space for politics, its actors must

not only create networks ‘at home’, but also foster durable connections with external sites

of regulatory decision-making within institutionalized arrangements such as the EU or the

WTO;

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- within these sites, representations of territory are vital resources which determine not

only policy choices, but also durable ‘assignments’ of the authority to even be involved in

such processes (Carter and Smith, 2008).

2. Industry-Territory Relations in Action: The case of Scotch Whisky

In order to demonstrate the heuristic value of the approach presented above, I have chosen to

analyse in some depth one particular set of issues that my ongoing research on the Scotch Whisky

industry has come across1. More precisely, the process this section endeavours to trace concerns

the preparation and adoption of legislation which will codify or recodify in law a number of the

industry’s key institutions. As will be shown, plans for this legislation first emerged in 2003 from

conflict between rival distillers. In the short term, this dispute was settled through collective

agreement within the Scotch Whisky Association (SWA). However, part of its resolution entailed

problematizing the labelling issue as a public problem which needed to be clarified as part of the

implementation of EU and WTO legislation. For the next four years, many actors considered

that the best site for providing institutionalized regulation of this problem was the Scottish

Parliament. However, since the election of a Scottish Nationalist Party-led government in May

2007, plans for a symbolically charged ‘Scottish Scotch Whisky Act’ have, ironically, been

dropped in favour of a technicized UK statutory instrument. Through, unpacking successively

the three parts to this story, our framework will be refined and interpretations of the spaces for

politics and causal processes involved will be highlighted.

Act 1: From an inter-distiller conflict to a collective problem

From its institutionalized beginnings in the mid-19th century, Scotch Whisky has always been a

highly competitive industry within which firms have sought to increase their profitability through

judicious mixtures of production, marketing and capitalization strategies (Daiches, 1995; Mclean,

2003). In an industry where stocks need to be ‘laid down’ to mature for at least 3 years, and

sometimes for as long as 25, its Finance Institutionalized Relationship (IR) takes on particular

importance. Indeed, at least when compared to many other spirit drinks, Scotch’s relatively high 1 Apart from documentary analysis, to date this research has entailed a series of semi-structured interviews conducted with staff of the Scotch Whisky Association and the Confédération européenne des producteurs de spiritueux (CEPS), officials from the Scottish Executive and the European Commission and representatives of three whisky producers. The research has been financed by the Aquitaine Regional Council within the framework of the programme ‘Délibération et gouvernance’ run by Sciences Po Bordeaux.

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costs of production, distilling, blending, ageing and marketing fuelled a major shift in the

ownership and capitalization of the industry in the 1970s and 1980s. Although many small

distilleries still remain within an industry that encompasses 100 distillers in total, the legacy of

takeovers and mergers from this recent past is that today two major conglomerates quantitatively

dominate the industry: Diageo (34% of world market share and 29 distilleries) and Pernod Ricard

(23% and 15) – a development which has had considerably effects upon the competitive

dimension of the industry’s Employment IR. Banks, particularly those based in Scotland,

participate strongly in the regulation of the industry’s Finance IR. In terms of its reglementation,

however, this IR depends heavily upon Trans-Industry regulation which, like that of the

Employment IR, clearly extends way beyond both Scotch and Scotland. Indeed, most of the

institutions which structure the Finance IR apply on scales which range from the global, to the

EU and the UK.

Notwithstanding the importance of capital, not even the largest firms in the Scotch Whisky

industry are free to produce and market their products without additional constraints. On the

contrary, supply of this product is regulated firstly by the rules set within its Purchase IR which

concern how one can produce a drink that is entitled to bear the name ‘Scotch’. First codified in

UK law in 1909, and most recently by the 1989 EU drinks regulation and the UK’s Scotch

whisky Order of the previous year, these rules concern this product’s content (water, malted

barley, whole grains), ageing (at least three years), alcoholic strength (40%) and place of

manufacture (Scotland). These rules are supplemented by others set and implemented through

the Commercial IR which concern taxation, labelling and intellectual property rights. In short,

both individually and in combination, all these rules are part of institutionalized policy

instruments which feature territorial boundaries, determine the eligibility of competitors and

stakeholders and also influence the institutionalized meaning of the product, together with the

professional identities to which it is associated (Stanziani, 2005). Consequently, these rules have

had structuring effects throughout Scotch’s Institutional Order (IO).

Despite the upheavals experienced in the Financial IR over the last four decades, and the knock-

on effects upon the Employment IR, until five years ago the industry’s Purchase and Commercial

IRs had remained remarkably stable. Rules regarding production were virtually untouched,

taxation levels changed in degree but not in principle and labelling requirements had been subject

to only minor modification. As will be shown subsequently, the deepening of the EU, the

creation of the World Trade Organization (WTO) and, more specifically, the adoption of its

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Trade Related Intellectual Property and Services (TRIPS) agreement in 1994, all led the industry’s

protagonists to adjust their political work, but not to change it radically. However, the relative

serenity of Scotch’s IO disappeared virtually overnight because of a dispute sparked in 2003 by its

biggest player: Diageo. This dispute began because of a decision taken within this company

regarding Cardhu, one of its leading brands of malt whisky. Until then, Diageo had complied with

industry convention which required that a ‘single malt whisky’ should be entirely produced in one

distillery. Lacking stocks to be able to supply a then rapidly growing Spanish market, managers of

Diageo decided to produce more Cardhu by blending it with other malts, altering the labelling

from ‘single malt’ to ‘pure malt’, but otherwise not drawing the consumer’s attention to this

change in production method. This provoked an immediate reaction within the industry

described on interview by one Scottish Executive official as follows:

‘Other producers felt this was unclear – it didn’t necessarily give the consumer the message that they were buying a blend of different whiskies. Because the packaging was to stay largely the same and ‘single’ and ‘pure’ were simply substituted for each other, it was not clear that there was a shift in what the product actually was. Other producers felt that this was not going to be clear and would undermine the cachet of single malt whisky which is regarded as the premium end of the market’ (October, 2006).

However, more typical of reactions witnessed by the press in 2003, the director of a medium-

sized distilling company used more politicized terms when stressing that the issue concerned the

‘stealing’ of ‘the value attached to single malt’:

‘It’s about defining the marketing boundaries more clearly. I feel very strongly about this. We spend millions of pounds on our brands. This is about the fundamental values of our industry. Diageo were trying to push the boundaries too far’ (November, 2007).

Back in 2003, similarly incensed by this strategy and the values behind it, representatives of other

malt producers, in particular William Grant & Sons, brought Diageo’s new practice to the

attention of the media2 and, framing it as a collective problem, placed it firmly on the agenda of

the Scotch Whisky Association (SWA). Through a combination of the expertise of this

organization’s permanent staff and politicized argumentation made within its governing Council,

a resolution of the precise issue raised by the Cardhu affair was found relatively rapidly3. Within

Diageo, a decision was taken to revert to Cardhu’s original production and labelling strategies and

2 ‘Grants step up pressure on Cardhu’, The Scotsman, 16th November, 2003. The specialized press, eg. Drinks International, made even more of this story which was even raised in the UK Parliament during Prime Minister’s question time. 3 ‘Cardhu malt mix taken off market’, The Scotsman, 10th March, 2004.

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thus to drop the category ‘pure malt’4. The significance of this conciliation of interests should not

be understated. As one distillery manager said on interview, ‘the SWA managed this with a lot of

discretion. Dealing with our dirty laundry in public would have been disastrous for the whole industry. Cardhu

could have been a flashpoint’ (November, 2007).

However, the issue had much wider ramifications because its resolution also entailed the setting

up of an internal SWA working group charged with revising a wider range of the industry’s rules.

The report of this group was made to the SWA Council in 2004, allowed to circulate within the

industry and then proposed as the basis not just for a revised set of industry conventions, but for

new legislation. Indeed, during this process, it was decided within the SWA that proposals to

codify five categories of Scotch Whisky5 were now to be accompanied by plans to legislate over:

- authorized use of five regional names as Geographical Indications (GIs) on product

labelling (Highland, Lowland, Speyside, Campbeltown and Islay);

- a requirement that all Scotch be wholly matured in Scotland;

- prohibition of exporting Single Malts until bottled and labelled.

During this process of problem shaping and extension, it is important to grasp that debates had

been influenced by two ongoing streams of political work within which actors from the SWA

were already heavily involved. The first concerned a then forthcoming revision of the EU drinks

regulation. Planned for legislation in 2006, consultations were well under way in 2004. In

particular, SWA officials were keen to use the revised regulation as a means of introducing legally

binding GIs into their industry. This proposal spilled over into a second series of ongoing

political work concerning the WTO and its TRIPS agreement. In an industry frequently troubled

by counterfeit and the ‘passing off’ of spirits as Scotch, representatives of the SWA were keen to

be able to use the TRIPS agreement in order to facilitate legal prosecution of fraud throughout

the world. Obtaining legal definitions of regional names was seen as an important means of

achieving this aim.

In summary, during the transformation of what had initially been an inter-company dispute first

into a collective problem, and thereafter towards being a public one, connections between issues

regulated within the industry’s Purchase and Commercial IRs were made, argumentations

developed and alliances built or rebuilt. As we have just seen, even at this stage, the political work 4 Gaining access to this process is difficult to say the least. However, the speculative analysis of a competitor at least provides a tenable hypothesis: ‘I think some manager came in from Proctor or Gamble or somewhere like that, wanted to put notches on their belt from a marketing point of view. They were having their three years as brand manager for Cardhu…’ (November, 2007). 5 Single Malt, Single Grain, Blended, Blended Malt, Blended Grain.

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undertaken was both local and global whilst encompassing mutiple usages of references to

territory. However, one major element of uncertainty remained concerning the political

assignment to make decisions, and consequently law, in this area: which public authorities should

prepare and adopt the new legislation?

Act 2: Problematizing Scotch Whisky as a Scottish problem

From the viewpoint of formal legitimacy, legality and observation of past practice, the most

obvious ‘venue’ for developing this legislation was the UK, ie. Whitehall and Westminster. First,

previous whisky acts had been set within and through these organizations. A revision of this

legislation therefore ought to have been legally straightforward because it involved a direct

precedent. Second, in accordance with the devolution settlement (Bulmer et. al., 2002), actors

representing the UK would be heading that country’s delegation in the negotiations over the new

EU spirit drinks regulation. Negotiating a UK whisky act at about the same time could be seen as

more likely to efficiently produce coherent national-EU policy solutions. Finally, and again

according to the horizontal institutions of devolution, representatives of the UK were solely

responsible for defining and defending British industries over issues of bi-lateral and multi-lateral

trade, both through UK trade diplomacy and through its involvement in the EU’s intervention in

this area. Despite all these reasons for concentrating political work ‘in London’, however, a

decision was taken within the SWA to attempt to legislate ‘in Edinburgh’ through the Scottish

Executive and the Scottish Parliament. More precisely, moves towards what was to have become

a ‘Scottish Scotch Whisky Act’ involved new and original attempts to problematize and politicize

the regulation of this industry by deliberately invoking references to the territory of Scotland.

Interviews with SWA and SE officials provide sources for retracing these processes. During an

initial interview in April 2006, an SWA official first stressed that this preference reflected ‘the need

for a consolidated Scotch whisky law’, implicitly highlighting how legislating in Scotland would provide

an opportunity to efficiently introduce or update an all-encompassing set of policy instruments

that would have worldwide impacts:

‘This is a domestic piece of legislation that will have international implications. As we fight cases around the world, courts ask ‘what’s the law on Scotch?’ There’s the Scotch Whisky Act but there’s also labelling laws in different pieces of legislation, there’s the EU regulation. With a consolidated law that has been accepted at EU level, with a technical dossier, the Scottish Executive and Parliament will pass legislation that will have an impact in courts around the

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world. It will make our lawyers’ jobs easier. Because countries often say they have their own labelling rules – but if we say there is one piece of legislation, this will be very useful’.

Whilst highlighting the ‘efficiency’ of legislating in this way, this official also revealed a preference

for the political assignment of authority to Scotland using more value-laden language: ‘the Scottish

Parliament is a natural home for this’. Interpreting the social construction of this ‘naturalness’,

however, entails both a risk and a fruitful avenue for analysis of the political usages of territory.

The temptation is to make assumptions about the perceptions and preferences of actors within

the SWA, as well as what caused them. A culturalist, for example, might well conclude that actors

of Scottish nationality would spontaneously represent Scotch as a Scottish problem and therefore

seek to legislate through Scotland’s recently established arenas. On the other hand, an exponent

of rational choice theory would probably conclude that Scottish legislation would fit with the

marketing strategies of firms and of their desire for ‘efficient’ legislation. However, always

analytically dangerous, this type of assumption is particularly unhelpful to understanding the case

studied here. Founded instead upon sociological theory and methods, our research set out to

understand the construction of the Scottish Parliament as ‘a natural home’ for this legislation by

retracing how this statement fitted with institutionalized representations of reality, logics of

action and patterns of interaction that had developed within the SWA over a number of years.

Before devolution, the SWA had always kept Scottish Office (SO) officials informed of their

dealings with Whitehall and Westminster. Indeed, interviewees from today’s Scottish Executive

who had previously worked for the SO emphasized how they had always had some input into the

policy process. Nevertheless, they consider that devolution has been a watershed for them:

‘I worked in the agriculture department and basically policy was dictated by Europe and Whitehall knew the ropes. I always saw my role as making sure that Scotland got the best possible deal within the rules that Brussels and Whitehall were making, that we get the biggest share of the cake we could possibly get – whereas now we are actually making policy’ (May, 2006).

More generally, since devolution, this framing of the legitimacy of the Scottish Executive to

engage in the regulation of the whisky industry has been reflected in at least three developments.

The first concerns the publication of two partnership documents, one in 2000, the other in

20056, which formally ‘sealed’ and mediatized a strong interdependent relationship between the

Executive and the SWA. The second has been a steady increase in the number of ‘diplomatic’

visits by Scottish ministers to third countries and the organized raising of trade issues which 6 A Toast to the Future (2000) and Scotland’s Enterprising Spirit (2005).

17

concern the SWA during these encounters (eg. ‘discriminatory’ tax rates in India). Finally, the

least visible, but probably most important, post-devolution development for the regulation of this

industry has been the willingness of the Executive to commit human resources to it. Since mid-

2006 this has taken the form of a high-ranking ‘fast-track’ civil servant being assigned uniquely to

preparing both a new Scotch whisky act and participating in the UK’s delegation to the EU

negotiation on spirit drinks.

Between devolution in 1999 and 2004-6, the Scottish Executive had therefore consistently

undertaken political work in order not only to involve itself in the regulation of the whisky

industry, but to attempt to take a lead within negotiating arenas charged with shaping problems

and taking decisions which would have UK, EU or even global-scale effects. This strategy clearly

pleased actors within the SWA who responded by giving all possible assistance and

encouragement to what amounted to a shift in alliances within Scotch’s industrial community. As

we have seen, references to the territory of Scotland were repeatedly used to problematize and

legitimize this framing.

Notwithstanding this level of mutual understanding and interdependence, however, from mid-

2006 to early 2007, negotiations with Whitehall about proposed legislation became bogged down

and eventually ground to a halt. One frequently mentioned reason for this were the then

oncoming Scottish elections of May 2007. Just as significantly, however, during this period, high

levels of uncertainty emerged regarding the political assignment to legislate over this issue and,

implicitly, the legitimacy of actors within the industry’s Purchase and Commercial IRs. Scotland’s

then Labour-dominated ministers chose not to override this uncertainty and demand the right to

legislate by politicizing what, for two years, had been widely framed as a ‘Scottish problem’. But

how would a newly elected Scottish Executive and Parliament -led since May 2007 by politicians

from a Scottish National Party (SNP) committed to ‘independence for Scotland’- interpret this

situation?

Act 3: Depoliticization in the UK

Although one might have expected the SNP to politicize whisky legislation and press publicly for

a Scottish Scotch whisky act, in fact quite the contrary has transpired. Indeed, as early as October

2007, the UK secretary of State in charge of the Department of Environment, Food and Rural

18

Affairs (DEFRA) ‘announced the steps Government is taking to enhance the protection of Scotch whisky’7.

These steps have thus far included the launch of a formal consultation procedure, an impact

assessment and plans to legislate using a UK Statutory Order by the end of June 19988. How can

what appears to be a significant climb down for the Scottish Executive and Parliament that

constitutes nothing less than the abandonment of a Scottish Scotch Whisky Act be explained?

More specifically still, why has an Executive led by an SNP that has renamed this body ‘the

Scottish Government’, chosen not to politicize this issue, and this during a period where it has

repeatedly mediatized and provoked value-laden debate over many other aspects of policy-

making under devolution?9 As one official underlined to us, ‘the SNP leadership could have played

politics with this but they have not’ (November, 2007). Why not?

Returning to our analytical framework provides a means of answering these questions which, by

uncovering the ongoing and deep-seated politics of this industry, highlights four major

uncertainties that remained in the framing of today’s Scotch Whisky as a Scottish problem.

The first of these uncertainties concerned the breadth of the proposed legislation and how this

should be framed. The issue of whisky categories was initially presented by the SWA as a food

and drink issue, and therefore within the devolved competence of the Scottish Parliament.

Similarly, the institutionalization of regional names as GIs, or the requirement that all malts be

matured solely in Scotland, could have been presented in this way too. However, aided and

abetted by colleagues in the UK’s Department of Trade and Industry (DTI), officials from

DEFRA were quick to highlight aspects of these proposals which they framed instead in terms of

trade and the European single market: both competences that had been ‘reserved’ to the UK

government. In short, this uncertainty over framing reveals an unsettled ordering of the

assignment to make law within Scotch whisky’s Purchase and Commercial IRs. Indeed, if

continued increases in trade of this product and the hightened salience of the WTO have directly

modified the Commercial IR through what Sassen (2007) calls the ‘self-evident globalization’ of

this industry, the consequence has not been regulation of this IR on a uniquely worldwide scale.

Rather not only has the pluri-site dimension of this regulation been reinforced, but it has also

‘contaminated’ the Purchase IR and, in so doing, changed the frontiers of its institutions and the

locus of its principle negotiating arenas.

7 DEFRA press release, 8th October, 2007. 8 All these documents can be consulted at www.defra.gov.uk 9 See the websites of newspapers such as ‘The Scotsman’ or ‘The Scottish Herald’.

19

This first uncertainty spilled over onto a second concerning the scope of new legislation: should

it apply only to whisky or be mixed in with a more horizontal law that concerned all spirits

drinks? Given the temporal overlap with implementation of the EU’s new spirit drinks

regulation, some actors argued for a UK statutory instrument of the second type. Representatives

of the SWA, however, were very keen to preserve the specificity of legislation for Scotch alone.

The reasons publicly stated for this have been ones of expediency, efficiency and clarity. But one

also needs to take into account the effects of the professional identity of actors in the Scotch

whisky industry who frequently represent the rest of alcohol producers as a less noble ‘other’

(Augé, 1994).

A third uncertainty concerned the fit between new legislation and the UK and EU drive for

‘better regulation’. As one Scottish Executive official put it when explaining why his organization

could not just implement the SWA’s ‘package’:

‘We may consider that some things could be achieved by other means (…). It may be that other parts of the food and drinks industry have no desire for legislation and would prefer codes of practice. There is a debate about better regulation – whether imposing additional legislation in an industry is a good thing’ (October, 2006).

In short, uncertainties about the articulation between legislation on Scotch and the ‘interest’ of a

much wider set of industries remained.

Finally, and more pervasively, framing new legislation for Scotch as a Scottish problem of course

raised the issue of whether the devolution settlement of the late 1990s could and should be

reopened to discussion and, possibly, change. Here, officials in the Scottish Executive have

consistently represented this uncertainty as a reason for hesitation and caution:

‘It’s difficult. The SWA would say that if it can all be achieved in Scotland then one should secure some kind of transfer of functions. But it is not as simple as that. Government would not want to devolve a matter that would have unforeseen consequences and open the gate’ (October, 2006). ‘Before, neither this administration or the UK administration was willing to concede that they did not have competence on this so they just sat there in a stalemate. It didn’t get to the point where either side said ‘we’ll just do it and risk a challenge to the devolution settlement’ (November, 2007).

In summary, the deepening and accumulation of these four sets of uncertainties led to a

transformation in the commonly held representation of a Scottish Scotch Whisky Act from being

20

an opportunity to being a risk. In order to understand how this change in framing took root

within the industry’s Institutional order then spread throughout its actors, three hypotheses about

the linkage between argumentation and alliance-building will be tested during the remainder of

our research.

The first of these concerns interaction and interdependence within the Scottish Government.

Ministers have changed since May 2007 but officials have done so too. In the case of the latter,

however, continuity in the provision of cautious advice to ministers appears to have been

assured. Indeed, interviews carried out to date suggest that these officials have decided amongst

themselves that leaving legislation to Whitehall and Westminster ‘makes sense’:

‘There is so much in the press about fights between Scotland and the UK. But in fact ministers here are taking a very pragmatic approach. So when we put it to them, ‘let’s take a pragmatic line so that we can do it along with the Spirit drinks regulation using the European Communities act where no-one needs to concede competence –even though this was letting the UK government do something that was seen as economically Scottish- actually they put the needs of the industry first. Which is fantastic. You don’t always see that! The SWA are pleased and it certainly makes our lives easier’. (November, 2007).

Although highly technocratic and depoliticizing, this discourse also reveals a second site for shifts

in arguments and alliances which needs deeper study: the SWA. How and why has an

organization who’s representatives publicly proclaimed the need and social meaning of a Scottish

Scotch Whisky Act come to ‘warmly welcome UK Government plans to introduce new

legislation’10? Has pressure from distillers only concerned with achieving an efficient and quick

solution to their regulatory issues led to the abandon of a politicized use of territory? Or have

representatives of these companies and SWA officials been chiefly concerned to avoid the SNP

using whisky as a ‘political football’ within a broader ‘game’ of devolution which, ultimately, may

concern them for reasons which, at least for some of these actors, have been more personal than

professional?

Finally, a third set of alliances which merits greater study concerns the links between the SWA

and various representatives of Whitehall and Westminster. Historically, these relations have been

very close and highly interdependent and taken the form of a UK-scale industrial community. As

we have seen, this scaling has been destabilized incrementally by a number of developments. But

was Scottish legislation eventually seen as a step-level change that risked durably undermining the

community? Moreover, what role has a relatively new extra-industry body –the UK government’s 10 SWA news release, 8th October, 2007.

21

Scotland Office- played in mediating between the politicians, officials and representatives of

private companies concerned?11

Conclusions

Although further research needs to be undertaken on these and other points, this case study,

together with the analytical framework which has structured it, has nevertheless generated three

conclusions which will hopefully be of interest to our workshop.

The first concerns how one studies changes in the scale of government that appear to be linked

to ‘constitutional’ processes such as Scottish devolution. As we have underlined in greater detail

elsewhere (Carter and Smith, 2007; Smith, 2008), social science generates little knowledge about

this process, its cause and its effects if it concentrates excessively and in a general fashion upon

modifications of formal legislative or executive competence. On the other hand, a great deal of

new information can and should be developed by undertaking in-depth sector by sector studies

of the interplay between change in formal rules and the reinstitutionalization of institutional

orders such as that of the Scotch Whisky industry. To use the language of the workshop, one

cannot analyze fully the effects of constitutional change without grasping how such ‘spaces for

politics’ were configured at T1, discovering their ordering at T2, then conducting causally

oriented process tracing to analyze how change occurred, or stasis was reproduced, between

these moments in time.

This paper’s second conclusion concerns how one studies the impact of territory upon the

regulation of industries. We have attempted to show the heuristic value of a generic approach to

the politics of industry built around four concepts: industry, institutionalized relationships,

institutional orders and trans-industry regulation. This analytical framework allows one to grasp

the interpenetration of logics of action that are too often studied separately as ‘economic’ or

‘political’. But this paper also goes further to suggest that including a line of questioning on the

usages of territory provides conceptual tools with which to better understand the political

struggles that lie at the heart of the institutionalization and legitimization of each industry.

Indeed, by examining our case study of Scotch whisky from this perspective, we have been able

11 Interestingly, DEFRA’s press release in October 2007 announcing UK government action quotes at some length the Secretary of State for Scotland rather than DEFRA’s own minister.

22

to unpack and highlight how territory is constantly at issue within, rather than alongside, its

regulation.

This point leads into a third and final conclusion concerning the scaling of contemporary spaces

for politics. The case of Scotch highlights how today the regulation of industry takes place

through sets of overlapping sites for negotiation which, for the sake of analysis, can be

characterized as ‘Scottish’, ‘UK’, ‘EU’ and ‘global’. However, this development has not resulted in

a homogenous institutional order for the industry that is ‘multi-level’. Instead, actors find

themselves striving to be omnipresent in all the negotiating sites and to conciliate institutions

who’s scale of impact vary considerably. Studying these ‘spaces for politics’ constitutes not only a

challenge for empirical research. More fundamentally still, conceptualizing these spaces, and

building appropriate research designs represents a major and exciting challenge. This paper has

attempted to show how institutionalist political and economic sociology now possesses the tools

with which this challenge can, and should, be addressed.

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