Scotch decline slows despite Russian drought

The decline of Scotch whisky exports slowed to -2.6% in 2015, when not a single bottle of blended Scotch was shipped to Russia, according to WhiskyInvestDirect.

The decline of Scotch whisky exports slowed in 2015, new figures reveal

Citing HMRC figures, online whisky trading platform WhiskyInvestDirect reports that global value exports of Scotch fell to £3.85 billion in 2015 and volumes fell -2.9% to 324m litres of pure alcohol.

However, this decline marks a “significant improvement” to 2014, when global exports plummeted 7%.

While trade body the Scotch Whisky Association (SWA) is yet to confirm official industry export figures for 2015, its chief executive David Frost previously said the first half of the year showed the decline of the industry is “slowing” and that Scotch will return to growth in 2016.

International challenges such as the on-going austerity campaign in China, “geopolitical risk” in Russia, as well as currency issues in other emerging markets, have impacted the Scotch whisky sector in recent years.

According to WhiskyInvestDirect “more than 80% of last year’s global drop in Scotch whisky exports came from Russia, Brazil and oil-producer markets, hit by the collapse in commodity prices”.

Together, these three factors accounted for £84m of the total £102m value loss.

While the Russian market has been greatly impacted by embargoes imposed on western goods, Brazil has suffered from persistent currency turbulence. Indeed, WhiskyInvestDirect notes that Scotch exports to Russia in 2015 were just 3% of those in 2013, while not a single blended bottle was shipped to the market last year.

The US remains the number one export market for Scotch whisky in terms of value, with £749m worth of bottles shipped to the country last year, while France is the largest by volume, with 49m LPA imported.

By volume, Japan, Poland and Mexico saw the fastest growth (+36%, +34%, +33%) and the Netherlands and Turkey saw the greatest value gains (+25% and +23%).

China, where numerous Scotch brands have struggled since an austerity campaign was declared in 2012, also showed positive signs of growth, with value exports increasing 5.2% and volume exports up 2.1%.

“Today’s broad base of solid consumer markets means neither the oil-price collapse nor the global economic slowdown is making a significant impact on the Scotch whisky industry’s overall strength,” said WhiskyInvestDirect, which was launched by Rupert Patrick, Diageo’s former commercial director for Africa regional markets, last year.

The first online trading platform for maturing stocks of Scotch whisky, WhiskyInvestDirect claims to solve the “real problem” of diminishing cash flow in the industry.

The SWA is expected to release official 2015 export figures for the industry in the coming weeks.