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The value of Scotch whisky exports might be on the up – but volume isn’t

30 October 2017

4:25 PM

30 October 2017

4:25 PM

Scotland’s whisky industry is the UK’s single largest food and drink export, accounting for almost a fifth of Britain’s the sector’s exports. It’s also the number one internationally traded spirit in the world, and changes in the market can, therefore, cause something of a stir in the UK exports market. That’s why today’s statistics from the Scotch Whisky association are worth taking a look at.

In the first half of 2017, Scotch whisky exports grew in value by 3.4% to £1.8billion – showing that despite the many new arrivals on the whisky market, Scotch continues to hold its own. Single Malts in particular have seen their popularity increase drastically. Over a quarter of all Scotch whisky shipped overseas is now Single Malt, with exports growing 7% to £479 million in the first sixth months of this year.

The USA has long been a big consumer of Scotch Whisky, and that doesn’t look set to change. £388 million of Scotch Whisky was exported to the states in the first half of the year, with £123 million of that being Single Malts. New markets are emerging too – we exported £27million of Scotch to China, while even though Japan now produces its own internationally acclaimed whiskies, they still imported £43 million of Scotch – an increase of 19%.

However, for all of the good news there is also some bad. Although the value of Scotch exported in the first half of 2017 has increased (helped by a weak pound and the popularity of Single Malts, which are pricier than blends), the actual volume of whisky exported was down by 2%, to 528 million bottles. Sales to France – in terms of volume – were also down by 6.8%; higher than the average decrease, and something of a worry given that the EU is the largest regional destination for Scotch. In the first sixth months of this year UK sales of Scotch also went down by 1 million bottles – again, not ideal.

The next question, then, is what Brexit might mean for the Scottish whisky industry. As Karen Betts of the Scotch Whisky Association points out: ‘The figures mask more concerning underlying trends…. With the changes Brexit will bring to the way the industry operates and trades, we need the support of the UK Government at home and overseas if we are to grasp the opportunities and keep this international success story going.’

With the budget fast approaching, the association have also called for cuts to whisky duty. In Hammond’s March budget he raised duty on spirits by almost 4% – something that the association blames for the decrease in UK sales. Whatever the cause of the drop in sales abroad, given the huge proportion of exports that Scotch represents in the food and drink industry, it surely makes sense to pay some attention to their advice.

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