When workers at Diageo's Johnnie Walker packaging plant in Kilmarnock agreed a redundancy deal days before Christmas it ended six months of bitter protests over the drinks group's decision to sever links with the Ayrshire town after 189 years. The plant's closure marks the culmination of a tough year for the scotch whisky industry which has been forced to slash jobs in the face of a deep recession.

As with many of its consumers, scotch producers partied through several bumper years only to face a major financial headache last year. Demand for the spirit began to slow in early 2009 and cracks began to appear in some of the industry's traditional export markets. Scotch Whisky Association (SWA) figures show sales, by value, were down 3.5% at £2.1bn for the first nine months of 2009.

After the high of three boom years, which culminated in record exports of £3.1bn in 2008, last year was one of the toughest in recent memory for the industry. Diageo prompted union fury by pushing through restructuring that will eliminate 900 jobs and end Johnnie Walker's historic links with Kilmarnock. Whyte & Mackay, owned by Indian billionaire Vijay Mallya, cut a third of its workforce, while in November the Edrington Group announced plans to mothball Tamdhu, the Speyside distillery – whose malt is a main component of Famous Grouse – for only the second time in its 112-year history.

But SWA public affairs manager David Williamson says the figures for 2009 were "encouraging" as conditions had improved after a "tough" first quarter: "Scotch whisky has been recession-resilient if not recession-immune." A surge in exports to countries such as Venezuela, which jumped 83%, helped offset problem markets such as Singapore where sales slumped 20%.

Diageo says the restructuring of its Scottish operation was not a defensive move but the magnitude of the global recession is seen to have hastened its progress. Johnnie Walker sales fell 11% last year while J&B, a favourite tipple of Spaniards when mixed with Coke, was off 13% as whisky exports to the recession-ravaged country plunged 26%. Edrington said the mothballing of Tamdhu was to "rebalance its distillation capacity" after the downturn "flattened" sales.

It is not the first time the industry has faced a hiatus. In the late 1970s, exuberant sales estimates resulted in the so-called "Whisky Loch". But distillers were forced to turn down production and mothball sites after growth fell short of expectations. Exports also slumped during the Asian economic crisis: dropping from £2.4bn in 1997 back to £2bn in 1998.

About 9,500 people, many in economically deprived parts of Scotland, are employed directly by the industry – though the UK supply chain has more than 60,000 workers. Geography was a significant factor in the political firestorm that followed Diageo's decision to close the Johnnie Walker bottling plant in Kilmarnock and the Port Dundas grain distillery in Glasgow, even though 400 new jobs are being created at its Cameron Bridge grain distillery in Fife. The bitter six month-long dispute was only resolved in recent days when workers voted to accept the redundancy package.

Diageo says history is not repeating itself and that its strategy remains unchanged despite straitened times. "The industry got it badly wrong in the 70s," says Ken Robertson, head of corporate relations at Diageo Whisky, who says consolidation and sophisticated forecasting methods mean the industry is a leaner, more efficient beast today. "The restructuring was not driven by the recession but by a long-term view of our business and the way we see investment panning out in the future."

Scotch accounts for a quarter of Diageo's sales with the lion's share of its whisky output, which also includes Bell's, Bushmills and Benmore, destined for export. "We need to get our business to a place where we can meet long-term sustainable growth," adds Robertson.

He says the industry learned a harsh lesson from the "Whisky Loch" years as they were followed by two decades of tough love, when growth bumped along at 0.5%. It was only five years ago that flowering demand from India, China and emerging markets gave the industry grounds for optimism.

"We have had to put on capacity to meet long-term demand and I'd argue that is the right call to make," says Robertson, who adds that the company has factored several recessions into its growth plans. "Individual companies will be making adjustments based on what they see ahead and the amount of stock they are sitting on."

The SWA insists that scotch producers still have a bright future. The export figures for 2009 will not be available for several weeks but Williamson says the final quarter is an important period accounting for 40% of malt sales and 30% of blended scotch.

He adds that making whisky is a marathon not a sprint: to be labelled scotch whisky, the spirit must mature in oak casks for at least three years. "It is a long-term business," he says. "What is distilled today will not be scotch whisky by law until after the London Olympic Games [in 2012] – or bottled by the Rio de Janeiro games in 2016."

Despite the gloom that descended last year, SWA figures suggest investment is running at its highest level since the early 1970s, with more than £500m earmarked for new distilleries, extensions and bottling plants in the past two years. After the drastic cuts in the 1980s the number of licensed distilleries has risen to 109, with a further seven in prospect, including Diageo's new malt whisky distillery at Roseisle in Speyside, which will open in the spring.

The export potential of scotch has been boosted by sophisticated marketing that has helped shed the bagpipes-and-shortbread image and acquire a luxury cachet. Mallya's £600m acquisition of Whyte & Mackay in 2007 was viewed as a defensive measure ahead of the eventual opening-up of the vast Indian market, where just 1% of whisky drunk is scotch, and there is a burgeoning middle class.

"Right now things are difficult on a global basis," adds Robertson. "The industry has to hold its nerve and keep its long-term perspective."

New world whiskies put Scottish pride on the rocks

A tough year for exports of scotch whisky coincided with some big blows to Scotland's distilling pride. In the awards stakes, 2009 was a year of success for overseas whiskies and Scotland's claim to be the world's finest producer came under threat from distilleries in America, Japan, India and even England. Early this year international whisky authority Jim Murray named 18-year-old Sazerac Rye from Kentucky in America the finest whisky in the world.

Its top billing in Murray's 2010 Whisky Bible pushed Ardbeg Supernova from Islay into second place, while there was further upset for the scotch industry with his third place choice – it went to a single malt distilled in Bangalore called Amrut Fusion. Japanese producers have also been enjoying widespread acclaim for their malts, piling up awards and exporting their whiskies around the world, including onto the shelves of UK supermarkets. England got in on the act in 2009, as the English Whisky Co bottled the first English whisky for more than a century at its distillery in Norfolk and has even been shipping to Scotland. Katie Allen