Scotch Whisky Exports Return to Growth

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Scotch Whisky Exports Return to Growth

Scotch Whisky Exports Return to Growth
September 20
12:03 2016

The first six months of 2016 were marked by improving Scotch whisky export performance, according to new analysis by the Scotch Whisky Association (SWA). Despite continued economic and political volatility in some markets, Scotch whisky’s global export volume grew by 3.1% over the first half of the year, with the equivalent of 533 million 70cl bottles shipped overseas, up from 517m bottles in the first half of 2015. This was the first growth in volume since the first half of 2013.

The customs value of shipments was down slightly by just 1% over the same period to £1.70 billion from £1.71 billion in the first six months of last year. This drop was much smaller than the decline in value of almost 3% experienced in the first half of 2015, another clear sign of improvement.

Encouragingly, the global market for single malt Scotch whisky continued to grow, with export value increasing by 6% to £431 million and volume up 3% to 49 million bottles. Single malts now represent a quarter of total shipment value, with exports more than doubling in value over the last decade.

Bottled blended Scotch whisky continues to represent the lion’s share of exports. While volumes increased by 1% to 362 million bottles, export value was down 4% to £1.16 billion, which may reflect the growth in single malts.

On a market basis, there were promising signs in the industry’s largest market by value, the United States. Exports increased by 9% in value to £357 million, with both single malts, up 22%, and bottled blended Scotch whisky, up 6%, enjoying growth. This reflected premiumisation in the sector.

The growth of exports to India also stood out, with value up 28% to £43 million. The SWA argued that the full potential of the Indian market would only be delivered through liberalisation of the exorbitant 150% basic customs duty, urging the UK Government to prioritise discussions with India as it develops its post-Brexit trade priorities.

The new figures cover the first half of 2016 and only one week of the period after the European Union referendum vote. The SWA pointed to the long-term challenges of defining the UK’s future trading relationship with both the EU Single Market and other countries. In the short term, however, the weakness of sterling since the Brexit vote is likely to boost export competitiveness.

David Frost, Scotch Whisky Association chief executive, says: “The first half of 2016 was marked by an improving Scotch whisky export performance, suggesting a strengthening in global consumer demand compared to the last couple of years. The industry-wide emphasis on craftsmanship and provenance, backed by investment, means that Scotch exports are well-placed to grow in the future, appealing to consumers in both mature and emerging markets.”

He continues: “It is clear, however, that the uncertainties of the Brexit vote will create challenges for exporters and we continue to encourage early clarity on the likely shape of the UK’s future trading relationship with the EU and other countries. We are working closely with our members and government to ensure the industry’s trade priorities are well understood, to promote open markets, and to identify opportunities to grow our exports in the future. Given the continued international uncertainty, we also look to government to make every effort to put in place a competitive domestic tax and regulatory environment, supporting a key home-grown industry.”

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