Scotch whiskies are matured in oak casks. Some use old wine casks. Some use new casks that are filled with cooking sherry for a day (I've no idea what they do with the sherry after that). At least one uses old Bourbon casks.
Until the stuff has matured and been tasted (gi's a job) it can't be graded. The best stuff is sold as pure malt. The second best stuff is blended with grain spirit and sold as standard whisky. The rejects get blended, watered down and sold as supermarket whisky flavoured drink (with the last two words in print that requires a microscope)