‘Signs of recovery’ for Scotch whisky exports
The Scotch whisky industry has once again been hit by global economic headwinds, but the sector’s export decline slowed to -2.4% in 2015, the SWA has confirmed.
Scotch whisky exports have declined for a third consecutive yearCorroborating HMRC figures released by WhiskyInvestDirect earlier this year, the Scotch Whisky Association (SWA) said exports dropped 2.4% to £3.86 billion in value terms, and by 2.4% to 1.16 billion bottles in volume terms.
While this marks the third consecutive year that Scotch exports have fallen, 2015 was a “significant improvement” compared to 2014, when global exports plummeted 7%.
The SWA said recent latest figures show “signs of recovery” and that Scotch whisky’s prospects for growth “remained strong” in the face of “challenging global economic conditions”.
“Scotch Whisky exports continue to deliver and the fundamentals for future growth are strong,” said David Frost, chief executive of the SWA. “Whilst the last couple of years have been more difficult, the longer-term picture has been one of increased demand, new investment, and premiumisation.”
Shipments of single malt Scotch increased from £914m in 2014 to £916.4m in 2015, with the category now accounting for 25% of value Scotch exports – up from 18% five years ago.
The SWA describes blended Scotch as a “trailblazer” for the sector in new and emerging markets, accounting for 72% of global value exports. However the category has suffered in recent years and 1.7% by volume and 3% by value in 2015.
Currency volatility
Scotch exports were negatively affected by volatility valuations and foreign exchange in countries, while exports to countries whose economies are driven by oil and other commodities were impacted by an economic slowdown.
Strikingly, WhiskyInvestDirect reported that more than 80% of last year’s global drop in Scotch whisky exports came from Russia, Brazil and oil-producing markets, which accounted for £84m of the total £102m value loss.
The online whisky trading platform also said exports to Russia were just 3% of those in 2013, while not a single blended bottle was shipped to the market last year.
France remained the largest volume export market for Scotch whisky, but declined by 4.3% to 176.2m bottles. Brazil also fell out of the top five markets for the sector after exports plummeted by almost 20% last year.
The US witnessed 0% growth in 2015, but remains the largest market for Scotch whisky by value, importing £749m worth of the spirit last year.
The SWA has previously predicted that the Scotch whisky industry will return to growth in 2016, but has warned against the potential negative impact of the UK exiting the European Union following next month’s referendum.
“Challenges remain, with an uncertain global economy and political uncertainty in some export markets,” added Frost.
“Continued EU membership will also help to support Scotch whisky exports to the single market and would leave Scotch well placed to benefit from the lower tariffs and fairer market access that the EU has been able to secure through its negotiation of Free Trade Agreements with countries around the world.”
Click through to the following pages to view the largest Scotch whisky markets by value and volume.
