Brexit hits Spain and Portugal TR whisky sales

Travel retail whisky sales in Spain and Portugal have been “affected” by currency fluctuations in the wake of the UK’s vote to leave the European Union, William Grant & Sons global travel retail director (GTR) has said.

“British passengers are whisky drinkers, and consequently sales in Spain and Portugal have been affected due to currency exchange rate changes since the referendum,” said Ed Cottrell, William Grant & Son’s GTR head, in a press statement.

However the devaluation of sterling has created some opportunities within the UK, he added. “The UK is becoming more attractive price-wise, and we have seen sales increase to Asian passengers, as the UK is perceived as ‘safer’ than France or elsewhere in Europe.”

Safety concerns have arisen primarily from the increased terror threat on the continent.

“Terrorism during 2016 has meant that Europe has never been seen as more insecure and unstable, which has had a direct effect on the number of Asian travellers,” Cottrell noted. “Fewer travellers means increased competition between the producers for market share and a fight for every single sale.”

Turkey remains a “challenging market” with “no signs of it improving in the foreseeable future”, according to the company.

Russia, another key market for travel retail spend, is however showing “tentative” signs of recovery. “While in comparison with 2014 and previous years, Russian travellers are not yet returning to full purchasing power, some improvement is definitely being seen – with the exception of St Petersburg which is primarily a tourist airport,” he said. “However, in other key Russian/CIS airports we have seen sales increases of 20% vs. 2015, which was -50% vs. 2014.”

Despite the challenging environment, William Grant & Sons GTR saw “very healthy growth” in many European markets in 2016, with performances “often ahead of the trend and our competition”.

For 2017: “Our remit is to further develop the already excellent business relationships with our GTR global and European based customers,” Cottrell concludes.

“We place an enormous amount of importance on these relationships, and work together to ensure the right portfolio of product is offered to customers, supported by engaging, fun and educational activations.”

Speaking to The Spirits Business at the TFWA World Exhibition, Cottrell cautioned against complacency for William Grant’s Hendrick’s gin brand as the category becomes increasingly congested, despite a “standout” year.