Scotch whisky exports continue to plummet

Exports of Scotch whisky have declined further in the first half of 2014 as the Chinese and Latin American markets continue to bite, prompting industry calls for increased government support.

Exports of Scotch whisky have continued to decline in 2014, prompting the SWA to call for increased government support

Figures released by the Scotch Whisky Association (SWA) today revealed that total exports of Scotch whisky reached £1.77 billion in the first six months of this year, down 11% from £1.99bn in the same period of 2013.

According to the SWA, this decline follows a decade of fast growth which has been stunted by “economic headwinds and uncertainty”.

The market for Scotch continued to decline in China, which has been embarking on a campaign of austerity among government and military officials since 2012.

SWA figures released in April this year shows that Scotch whisky exports to the country plummeted 30% in 2013, dropping the region out of the top 20 markets for the spirit.

The association also noted exports to key markets including Singapore, the US, Brazil and Mexico declined due to a number of reasons, such as economic slowdowns across some regions, a stronger pound sterling and destocking.

However, the SWA said there is confidence in the long-term future of Scotch, with plans for new distilleries underway and “up to £2bn of capital investment in Scotland committed by producers”.

With regards to regions, exports to France, the largest market for Scotch whisky by volume, increased 3% by volume to 86 million bottles and 6% by value, making it the second largest value market behind the US.

Exports to the United Arab Emirates (UAE) were up 26% to £54m, with the area acting as a distribution hub for parts of Africa, Asia and India.

Meanwhile, Australia was up 4% to £37m and there was 31% growth in India, demonstrating “potential future opportunities”. Other top 20 markets for Scotch whisky also showed solid growth, notably Taiwan, Canada and Japan.

Government support needed

David Frost, CEO of the SWA, expressed his confidence in the long-term prospects for Scotch whisky, but emphasized the industry’s need for government support in the face of increased devolved powers in Scotland.

“We are confident that Scotch whisky will continue to grow in the long-term as markets stabilise and new ones, such as emerging economies across Africa, open up,” he said. “However, it is clear that in the short-run that there are economic headwinds affecting exports.

“The latest figures also act as a reminder that the success of Scotch whisky can’t be taken for granted. We need support from government to beat down trade barriers and help us access new markets overseas.

“That is why we are determined to play a full part in the forthcoming debate about further devolution, so that it enables a supportive business environment to ensure the future success of Scotch whisky.”

Last week, Scottish citizens returned a “no” vote in the country’s independence referendum but there are plans for increased devolved powers from Westminster.