Scotch shipments finally return to growth

Global Scotch whisky volume exports have increased for the first time in three years, figures released by the Scotch Whisky Association (SWA) have confirmed.

Scotch whisky’s global export volume grew by 3.1% in H1

Despite continued economic and political volatility in certain markets, Scotch whisky’s global export volume grew by 3.1% in H1 2016 – the first growth in volume the category has seen since the first half of 2013.

The equivalent of 533 million 700ml bottles were shipped overseas, up from 517m bottles recorded in the first half of 2015.

Though the customs value of shipments was down by 1% over the same period to £1.70bn – from £1.71 billion in the first six months of last year – this drop is smaller than the decline of almost 3% seen in the first half of 2015, which the SWA says is “another clear sign of improvement”.

David Frost, Scotch Whisky Association chief executive, said: “The first half of 2016 was marked by an improving Scotch whisky export performance, suggesting a strengthening in global consumer demand compared to the last couple of years.

“The industry-wide emphasis on craftsmanship and provenance, backed by investment, means that Scotch exports are well-placed to grow in the future, appealing to consumers in both mature and emerging markets.”

Though blended Scotch whisky continues to dominate exports, with volumes increasing by 1% to  362m bottles, export values decreased by 4% to £1.16bn – possibly reflecting the growth of the single malt Scotch whisky market.

Single malts now represent a quarter of total shipment value, with export value increasing by 6% to £431m, and volume growing 3% to 49m bottles.

Promise in the US

The SWA added that there were “promising signs” in the US – the industry’s largest market by value – where exports increased by 9% in value to £357m. Single malts grew 22%, reflecting premiumisation in the sector, while blended Scotch grew 6%.

Export growth to India rose by 28% to £43m prompting the SWA to highlight the importance of discussions with India as the UK develops post-Brexit trade priorities.

The association argues that the full potential of the Indian market will only be reached through liberalisation of “exorbitant” 150% basic customs duty.

These new figures cover the first half of 2016, which including one week of the period after the European Union referendum vote.
Frost added:”It is clear that the uncertainties of the Brexit vote will create challenges for exporters and we continue to encourage early clarity on the likely shape of the UK’s future trading relationship with the EU and other countries.

“We are working closely with our members and government to ensure the industry’s trade priorities are well understood, to promote open markets, and to identify opportunities to grow our exports in the future.

“Given the continued international uncertainty, we also look to government to make every effort to put in place a competitive domestic tax and regulatory environment, supporting a key home-grown industry.”

In August, The Spirits Business reported that Scotch whisky volume exports had increased by 2.6% in H1, according to figures released by WhiskyInvestDirect (WID).

While both WID and the SWA have obtained their figures from HMRC, the SWA has confirmed that the data is revised throughout the year, accounting for any discrepancies.