Mark Reynier: Scotch declines not due to tax

Bruichladdich’s former managing director Mark Reynier has criticised the Scotch Whisky Association (SWA) for blaming declining Scotch whisky sales on high taxes, arguing producers have “ignored” the UK market for years.

Mark Reynier says the decline in Scotch whisky sales is not due to the UK’s high alcohol duty

The SWA, in partnership with the Wine and Spirit Trade Association (WSTA) and Tax Payers’ Alliance, launched the Drop the Duty campaign in November last year, calling for a 2% cut in alcohol duty in the next Budget, which is due to be announced on Wednesday.

Research by the SWA shows tax accounts for 78% of the cost of a bottle of whisky, and new figures released by the SWA last week revealed Scotch whisky sales declined by 5% to 83.3 million in 2014 attributed to the country’s “onerous” level of tax.

However, Reynier told Herald Scotland that alcohol duty is not to blame for the decline, but that producers were at fault for neglecting domestic sales since the early 1970s.

He also noted the struggle the category has had to shed its “fuddy duddy” persona.

“The reality is the consumer in the UK has been ignored,” Reynier told the news site. “They [distillers] are quite happy selling containers of the stuff to Venezuela and all around the world.

“But they have actually failed to address to credible attempt to reinvigorate the blended whisky sector in our home market.

“Ninety per cent is exported as you know, so it [the UK] is a relatively small amount in the scheme of things.

“So they have gone for the easier fruit in the new markets where their marketing power can do great things.”

Reynier continued to express it was not the place for the SWA to campaign for the entire spirits industry, highlighting that while whisky sales have shrunk, gin, rum and vodka are thriving.

“What about vodka?” he questioned. “I didn’t hear them squealing when that was going through the roof.

“I don’t hear them squealing that gin or rum are hugely successful.

“Perhaps now is the time for a resurgence – a reassessment of it, [blended] Scotch, as a drinks sector. Or perhaps it is gone forever, I don’t know.”

Last year, it was revealed Reynier had purchased a former Guinness brewery in Ireland that he plans to transform into an Irish whiskey distillery – Waterford Distillery.

He told The Spirits Business that he intends to challenge the “flavoured whiskey and standardisation” strategies of large producers with his new venture.

For the complete interview with Mark Reynier and more details on the Waterford Distillery, see the January 2015 issue of The Spirits Business magazine.