Scotch exports hit by Eurozone crisis

Scotch whisky exports declined by 5% last year as the industry continued to battle against a troubled Eurozone and falling Japanese consumption.

Scotch whisky exports have been hit by debt-ridden countries in Southern Europe

Global sales of Scotch increased to a record high of £4.3 billion in 2012, signalling eight years of consecutive growth, although the disappointing 1% value increase failed to match the 23% seen in 2011 and 10% in 2010.

Exports of Scotch to France, the category’s largest consumer, fell by 25% during the year from 205.3 million bottles to 153.9m, eclipsing the 20% decline felt in Spain.

The Scotch Whisky Association (SWA), which compiled the figures, claims the French volume depression is a result of the market stocking up before the excise tax increases in 2012.

Outside of the Eurozone, the US remains the top market for Scotch whisky by value, with exports breaking the £700m barrier for the first time, reaching £758m during the year.

Although consumption in Japan fell by 27% to 18.2m bottles, exports to the rest of Asia continued to grow, with Singapore up 2% and China up 4%.

Exports to Eastern Europe and Russia also continued to grow, with Estonia and Poland, both distribution hubs in the region delivering 10% and 18% growth respectively.

The news was equally positive in South America, where Scotch is one of the UK’s fastest growing exports to Mexico, increasing by 14% in value to £92m, and 11% in volume to 35.3m bottles in 2012.

Gavin Hewitt, chief executive of the SWA was optimistic about the results. “Scotch whisky continues to lead the way for UK food and drink exports,” he said. “A combination of successful trade negotiations, excellent marketing by producers, growing demand from mature markets, particularly the USA, and the growing middle class in emerging economies helped exports hit a record £4.3 billion last year.

“We deliver a remarkable £135 a second to the UK balance of trade. We are contributing massively to the government’s wish for an export-led recovery.

“There is confidence in the future of the industry, illustrated by the £2 billion capital investment that Scotch whisky producers have committed over the next three to four years. New distilleries have opened and older ones brought back to use to meet rising demand.”

The SWA added that the decline in volume, despite the increase in value, is “largely down to people trading up to single malts and premium blended Scotch. So, although a smaller physical amount of Scotch is being exported, it is more valuable”.