Kilbagie, founded by James Stein, began life as a corn mill in around 1720 then went on to become the largest distillery in Scotland in c1777, a massive manufacturing plant even by modern standards. The capital value of Kilbagie in 1780 was £40,000, approximately £8 million in today’s terms. An extract from the Statistical Account of Scotland 1791 – 1799 states ‘No situation could have been more eligible for a distillery than Kilbagie; and it was erected in the most substantial manner. The buildings occupy a space of above 4 acres of ground; all surrounded by a high wall. The barns for malting are of a prodigious size, and are 4 stories in height. A small rivulet runs through the middle of the works, and drives a threshing mill, and all the grinding mills necessary for the distillery; besides supplying with water a canal, which communicates with the river Forth, of about a mile in length, cut for the purpose of conveying both the imports and exports of the distillery‘.
Both distilleries had in excess of 850 acres of farmland at their disposal and Kilbagie alone generated enough animal fodder to fatten 7,000 cattle and 2,000 pigs. It had a staff of over 300 directly employed on site. This did not include the many other ancillary jobs connected to distilling.
The distillery started by producing grain whisky of a quality which could only be described as course, that was drunk for effect and not quality. It was claimed the spirit produced was ’only fitted for the most vulgar and fire loving palates’. Burns describes Kilbagie’s whisky as “the most rascally liquor and in consequence only drunk by the most rascally part of the inhabitants”.
One of the greatest accolades goes to James Stein in 1777 when he exported 2,000 gallons of whisky to England to be rectified in to gin. This was the first ever recorded movement of whisky outside Scotland and was the precursor to an export market now worth a staggering £3 billion to the Scottish Economy.
By 1779 Kilbagie had an annual output of 3,000 tons of spirit.
James Stein had his sights on the London Gin trade and by the early 1780’s he had installed an enormous plant capable of making 16 tons (5,000 gallons) of Holland’s Gin per day.
In 1786 a change in the law imposed extra duty on spirits exported to England which saw Kilbagie’s markets collapse overnight. James Stein’s reaction to this was to bribe the Solicitor for Excise to ignore this act. By 1788 Kilbagie was in sequestration due to yet another Act requiring all Scottish distilleries to give 12 month’s notice of intent to export.
The once mighty Kilbagie, the largest and most modern distillery in Scotland and one of the country’s largest industrial enterprises, lay silent from 1788 – 1794. By 1793 the buildings were subsiding and the machinery was in poor condition. The Steins bought Kilbagie from their creditors for the sum of £7,000 which was a fraction of its true value. The purchase was done through John Taylor, a relative of the Steins, allowing them to distance themselves from the transaction. In 1826 Robert Stein invented the Continuous still which was to revolutionise whisky production forever. The Steins operated the distillery up until the early 1800s when it was purchased by George Dunlop & Co who installed a Coffey Still under licence in August 1845. They went into sequestration in 1852; the final closure for Kilbagie as a distillery.