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Scotch whisky
exports value up by 3.4% driven by
Single Malt sales but export volume down
by 2%.
It appears
that Single Malt Whisky, the luxury
sector of Scotch whisky, has weathered
the global economic crisis. The Scotch Whisky
Association has released figures showing
that Scotch Whisky exports increased in
value by 3.4% in the first half of the
year to £1.8 billion, boosted by the
continuing growth in popularity of
Single Malts across the globe, including
the USA, the industry's largest market.
This growth benefits the entire UK
economy and its export performance.
Scotch remains Britain's biggest food
and drink export, making up almost a
fifth of the sector's overseas
shipments.
The analysis of official HMRC figures
published by the Scotch Whisky
Association (SWA) shows consumers are
continuing to sample more Single Malts
with exports up 7% to £479 million in
the first six months of the year. Single
Malts now make up more than a quarter of
the value of all Scotch shipped
overseas.
This trend was clear in the USA where
total Scotch exports were up 8.6% to
£388m and Single Malts jumped 14% to
£123m.
Scotch exports to many other mature and
emerging markets increased. There was a
marked return to growth in China - up
45% to £27m as the country's economy
grows - and exports to Japan expanded
19% to £43m.
The European Union (EU) remains the
biggest regional destination for Scotch
with the value of exports up 4% to
£559m, almost a third of the total.
But the Scotch Whisky industry needs
support to sustain growth in the long
term, not least as it manages the impact
of Brexit. Overall, the volume of whisky
shipped overseas was down 2% to 528m
bottles, and this was in the context of
relatively favourable exchange rates.
The lower volume and higher value is
partly as result of the shift to Single
Malts.
Some markets declined in the face of
continuing economic and political
headwinds, such as Brazil where the
value of Scotch exports fell 20% to
£22m.
The SWA argues that a strong home market
is required to underpin the industry's
global success and that Chancellor
Philip Hammond could help next month by
cutting tax on an average bottle of
Scotch from an onerous 80%. Recent
figures show that the UK market has
shrunk as excise duty has increased,
with a near 4% hike in the March Budget
seeing Scotch sales fall by 1m bottles
in the first half of 2017. A fairer
domestic excise regime would help boost
a world-famous industry which supports
40,000 jobs across the UK.
Such support at home would also
encourage long-term confidence and
underpin continued investment in the
industry and supply chain that, in turn,
relies on export success.
And one of the SWA's priorities for
Brexit is domestic reform to improve
competitiveness, including changes to
the current excise duty system.
Karen Betts, Scotch Whisky Association
chief executive, said:
"The value of Scotch Whisky exports was
up more than 3% in the first half of
this year to £1.8 billion, which is
great news. More and more consumers
around the world are seeking out the
fabulous range of Single Malts. It is
good to see demand for Scotch increasing
in a diverse range of mature and
emerging markets around the world.
"But the figures mask more concerning
underlying trends. The value of exports
is up but the volume is down. 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.
"Overseas demand for our quality product
requires investment by the industry in
the UK and that needs government
support. A strong domestic platform for
growth is vital and the Chancellor could
take a step in the right direction in
next month's Budget by cutting the tax
on an average priced bottle of Scotch
from the staggering level of 80%."
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