Scotch exports by volume drop 20% in H1

Scotch whisky exports by volume and value declined during the first half of 2023, as the sector failed to meet the sales surge seen during the same period last year.

The 20% drop in volume, compared with the same six-month period in 2022, equates to 630 million 700ml bottles.

Value-wise, the category performed better – but still experienced a 3.6% drop to £2.57 billion (US$3.28bn) during the first six months of 2023, figures from the Scotch Whisky Association (SWA) revealed.

The SWA attributed the shift to the global trend of premiumisation, and said consumers were trading up to premium blended Scotch and single malts, and increasingly blended malts.

In 2022, the Scotch sector recorded its best year to date, exceeding £6bn (US$7.3bn) in exports for the first time. The value of Scotch whisky exports grew by 37% to reach £6.2bn (US$7.5bn), while the number of 700ml bottles exported increased by 27% to 1.67bn.

Mark Kent, chief executive of the SWA, said: “2022 was an exceptional year for Scotch whisky exports, breaking records in both value and volume. So, at the halfway point of 2023, it is encouraging that the industry is keeping pace with export value, continuing to deliver significant economic growth through production and investment in Scotland and across the UK.

“Around the world, we continue to see the same trend – consumers drinking less overall and switching to higher-quality spirits like Scotch whisky.

“Premiumisation in the spirits category didn’t start during Covid-19, but the pandemic certainly accelerated the trend, and it remains the case that consumers are trading up, enjoying premium spirits, and consuming fewer units of alcohol. Scotch whisky remains well placed to benefit from this shift.”

The US remains Scotch whisky’s biggest export market by value, while France returned to the top as the category’s biggest export market by volume.

India remained a ‘high-volume’ export market for the category, with 72m bottles shipped there during the first half of 2023.

Importance of India-UK FTA

The SWA said it was continuing to stress the benefits of a UK-India free trade agreement, which it hopes could remove the 150% tariff on international spirits, and create greater opportunities for Scotch in the market.

If a deal is reached, it is thought Scotch exports could exceed £1bn (US$1.3bn) within five years.

Kent added: “The success of Scotch whisky cannot be taken for granted. The recent double-digit tax hike on Scotch whisky in the UK, the largest in 40 years, and the deepening of the competitive disadvantage faced by distillers versus other alcohol categories was a blow to the industry.

“The future potential growth of the industry, in terms of exports, job creation and investment across Scotland and our UK supply chain, is dependent on working in partnership with government. Growth at home and abroad, coupled with a supportive domestic regulatory environment, is also key to driving forward our sustainability strategy and achieving net zero.

“To deliver the platform for future growth, in the short term, this means three priorities. Firstly, no further tax increase in the autumn budget.

“Second, agreement of a comprehensive free trade agreement with India, which reduces the 150% tariff on Scotch whisky.

“And third, gearing regulation to support the industry to achieve its full potential, recognising that in supporting Scotch the government is supporting a high-quality, homegrown product which delivers more economic benefit per serve than any other alcohol category.”