Distillers Legal...

Distilling, one of Derry's oldest industries, once ranked as a leading employer of labour in the city. At the beginning of the last century, there were three distilleries in the city, and one in the parish of Clondermott, which in the year 1835 produced 19,000 gallons of spirit. Of the city's distilleries, Smyth's at Pennyburn had an annual output of 39,000 gallons, and the Abbey Street or Bogside distillery produced 44,000 gallons. Its joint owners were Mr. Ross Smyth and Mr. David Watt.
The Watt Family, which hailed from Ramelton, were the pioneers and, for a century and a half, the mainstay of the industry. Most of the Derry whiskey was exported to America, though the local market was considerable, despite the profusion of poteen stills that flourished in its hinterland. In 1833, there were 175 spirit licences in the city, catering for a population of 18,000.
In the heyday of the whiskey trade the censure that was later accorded to excessive drinking was not yet in evidence, for a report of the typhus epidemic in 1817 lists a supply of Pennyburn among the donations from "the benevolent gentry" to the victims, who were so numerous that they were accommodated in tents in the grounds of the fever hospital.
Though some outside observers dwelt on the prevalence of drunkenness in the city, the Press did not consider it worth reporting; prosecutions for drinking or the making and selling of poteen and theological disputations were far better "crack."
The author of the Ordnance Survey (1835) roundly berated the better paid workers, such as coachmakers and tailors, but offset his picture of a boozy proletariat by mentioning the city's 500 registered teetotallers, whose only recorded activity was attending tea parties. However, as the century wore on, there were reams of drink cases, often involving the major traffic offence drunk in charge of a horse or donkey.
The Pennyburn distillery closed in 1840 and the 50 men and boys employed there moved to Abbey Street, where the pot stills were replaced by the new patent stills, whose inventor, Mr. Aenas Coffey, came to Derry to supervise their erection. The work force further increased and the distillery became one of the best known in the United Kingdom when Old Tyrconnell superseded Pennyburn.

Possibly the emigrants took the taste with them for it dominated the American market; early films of major baseball games show the Yankees Stadium ringed with hoardings extolling Old Tyrconnell.
The Waterside distillery, which was owned by the Meehan family, of whom the last was Recorder of Derry, passed in 1870 into the control of Mr. David Watt. It closed in 1902 when it was amalgamated into United Distilleries Group, but the name was commemorated in the recently demolished Meehan's Row.
A mass closure of Irish distilleries followed the First World War owing to high taxation and decreased consumption and, what was particularly telling in the case of Watt's, the loss of the American market with the introduction of Prohibition. In 1921, the Abbey Street distillery closed, and distilling became another extinct Derry Trade.

...and illegal...

On a map drawn for the purpose of a Revenue Commission in 1836, Derry and Donegal are shown as the principal centres of the poteen industry in the North of Ireland. "Illicit distillation can scarcely be said to exist south of the Liffey or the Shannon" the report stated. In that year in Derry City there was 174 spirit licences and 165 for beer and, the report went on, "the public houses are of different degrees of respectability; in some of the inferior type gambling prevails but all are useful in diminishing the number of unlicensed houses and checking the sale of illicit spirits which is very extensive and on the increase."
The heyday of the poteen industry was about 30 years earlier, just after the Union; in 1815, when whiskey was selling for 9s. 6d. a gallon, the Excise duty was 6s. 11d. So heavily penalised was the legal trade that poor quality materials made it unpalatable, and many local stills were forced out of legal business. the risk of detection determined the mode of distribution. In Derry City, during the period of the Napoleonic wars when the Excise forces were directed to coastal defence garrisons, poteen was sold in open tubs in the street.
Twenty years later it was supplied by turfmen, who hid kegs under their loads, or small operators, ostensibly selling eggs or butter. Yet there were many who could afford "parliament" whiskey but preferred the "craythur" for its flavour and potency; only a degraded palate, it was held, could tolerate the taste of smoke in preference to the "hogo" of turf but they were not sufficiently numerous to form a specialist market. Production reached its peak in these years, for nearly two-thirds of all spirits consumed in Ireland were poteen. The government retaliated by recruiting an excise force of 1,000 men, who, within two years, seized 16,000 stills. Evidence was also given at successive Commissions, that amateur distillers were frowned upon by big operators, like the man near Derry who was in such a way of business that, "He is the only man of his sort who eats white bread, toasted, buttered and washed down with tea for his breakfast."
Success so striking must have called for exceptional qualifications, chief of which would inevitably be an aversion or well bridled fondness for his own products only teetotallers make successful publicans. But the Inspector-General of the Excise was sceptical and told the enquiry that he never knew anyone engaged in the making or traffic in poteen who grew rich by it. The social risks were often formidable; one harassed distiller complained, "As soon as it is known that I am making a run, every idle blackguard for miles around considers it neighbourly to drop in and drink my profits."
Next to Derry and its hinterland as poteen centres were Bun an Phobail (Moville) and Magilligan Point, but, when a Revenue cutter began patrolling the lough, those markets wilted. The Royal Irish Constabulary who took over from the older revenue force were much more successful in suppressing the traffic they were reputed never to use snuff, the better to smell out poteen but it was the imposition of spiritual penalties that led to the disappearance of of stills and shebeens in the North-West. Harassed by Church and State, the stillers' products deteriorated and, dependent on the least stable  of the community, passed into folklore.

Source: City on the Foyle by Sam Hughes, ISBN 0-9507059-0-X, pages 80-82.