FDBusiness.com

The contribution of the Scotch Whisky industry to the UK economy reached £7.1 billion in 2022. A new report by the Scotch Whisky Association (SWA) also reveals the industry supports 66,000 jobs across the UK, of which 41,000 are in Scotland. The Scotch Whisky industry is now responsible for generating £3 in every £100 of Scotland’s total Gross Value Added (GVA), and is the second most productive sector in Scotland, ranked just behind energy including renewables.

Scotch whisky companies have continued to invest to drive growth, employment and productivity despite domestic and international challenges. However, the sector is now warning that while there is room for further growth, Scotch whisky continues to face multiple barriers, including the highest spirits duty rate in the G7, key infrastructure in Scotland in need of investment, and trade deals – including with India – still to be finalised. These challenges combined with rapidly increasing competition from premium spirits in global markets puts future investment, growth and jobs at risk without government support.

Mark Kent (pictured), Chief Executive of the SWA, said: “The Scotch Whisky industry has once again proven its economic significance to the UK domestically and on the world stage, and these figures highlight the importance of backing a key sector for productivity, exports and employment.

“The past five years have been turbulent for our sector, as we faced retaliatory tariffs in the United States, in addition to the global pandemic and the knock-on economic pressures. The Scotch Whisky industry has remained resilient, with capital investment directed towards fulfilling our collective sustainability ambitions, creating world-class visitor attractions, and building more distilleries that will help boost jobs and growth.

“Ahead of the UK Spring Budget on 6 March and this year’s General Election, it is vital that the industry is supported by government so that businesses can continue to invest in the UK economy.”

The report found that 75% of the total GVA of the Scotch Whisky industry is generated in Scotland, equal to £5.3 billion annually – helped by legislation that requires all Scotch Whisky to be distilled and matured for at least three years in Scotland, and all Single Malt Scotch whisky to be bottled in Scotland.

The report also found that the industry performs a crucial role in driving productivity across Scotland. The manufacturing of beverages in Scotland – dominated by Scotch – produces £273,000 GVA per employee. Comparatively, the industry is second only to the energy sector (including renewables) at £279,000 per head (in 2019).

Scottish Secretary Alister Jack said: “I welcome this report which demonstrates the great strength and resilience of the Scottish whisky industry. The sector’s contribution to the economy, with ever-growing exports and investment in skills and jobs, is of vital importance to Scotland, and the whole of the UK.

“The UK Government wholeheartedly supports the industry. Scotch is not just Scotland’s but the UK’s most valuable food and drink export and that’s why we’ve given it 10 cuts or freezes in duty at the last 11 Budgets, as well as removing punitive tariffs imposed on the US market.

“We are pushing forward with new and robust global trade agreements that will continue to safeguard the interest of Scotch whisky, ensuring that the unique characteristics and reputation of Scotch are protected.”

Wellbeing Economy Secretary Neil Gray said:“The Scotch Whisky industry is extremely valuable to the Scottish economy in terms of production and exports and increasingly also for tourism and hospitality. It supports thousands of jobs – including in rural areas – and is a success story at home and internationally.

“Scotch Whisky is a world-renowned brand and our leading single food and drink export product. Continued growth in global markets means more jobs and investment across Scotland, our communities benefit and it entices visitors and residents to experience the incredible offer we have here in Scotland.

“The Scottish Government will continue to work with the whisky sector to drive further growth and success.”

Sara Thiam, Chief Executive of Prosper, said: “As well as detailing the vital contribution the whisky industry makes to the Scottish and UK economies this report also captures the increasing contribution that it makes to economic growth by generating a significant income and supporting thousands of jobs across the UK. The importance of the whisky industry as a flagship export sector could be further enhanced by governments through support of a business environment which promotes investment, innovation and decarbonisation.”

Key Findings

Key findings of the 2022 Scotch Whisky Economic Impact Report:

• In 2022, the Scotch Whisky industry, defined as the production and sales & distribution of Scotch Whisky, generated £7.1 billion Gross Value Added (GVA) (direct + indirect + induced) in the UK
• Out of this total, £5.3 bn was generated in Scotland
• The Scotch Whisky industry generates 3% of Scotland’s total GVA
• The industry supported 66,000 jobs across the UK and 41,000 in Scotland
• The manufacturing of Scotch Whisky is highly productive and generated £6.3 billion GVA across the economy, out of which £3.4bn were directly generated by production
• The industry has invested £2.1bn in capital projects between 2018 and 2022
• The industry accounts for 77% of Scottish food and drink exports, 26% of UK food and drink exports, and 2% of all UK goods exports.

A full copy of the report can be downloaded here.