World Spirits Report 2023: Scotch whisky

Despite facing certain challenges, the Scotch industry is on course to celebrate one of its best years.

Yearly figures will not be released until February but, so far, 2023 exports are up by 17% on 2019, and could exceed £6 billion (US$7.5bn) for only the second time in the industry’s history, according to figures from the Scotch Whisky Association (SWA).

Figures from Euromonitor International are also positive, with sales by volume for 2023 expected to reach 102 million nine-litre cases, up from 98.9m in 2022. By value, 2023 forecast figures are due to hit US$63.4m, up from US$59.9m the previous year.

But it has not all been positive. In August the UK increased alcohol duty for spirits by 10.1%, a move was widely condemned by the Scotch industry. While last month’s autumn statement saw alcohol duty frozen until 1 August 2024, spirits are still taxed higher than beer, wine and cider.

“The tax framework in the UK disproportionately penalises whisky – and that framework does not look like it will be changed any time soon,” says Kieran Healey-Ryder, head of whisky discovery for Whyte & Mackay. Mark Kent, CEO of the SWA, adds: “Fair taxation and support from the government in our home market is important – not only does it give the industry the confidence and stability to grow and invest, but it sets a precedent for the treatment of Scotch whisky in our global markets.”

Kent highlights the impact that distilleries have made on the Scottish economy, stating that more than two million people visited a Scotch distillery visitor centre in 2022, with £85m spent on site. But both Kent and Healey-Ryder say this achievement is tempered by a lack of investment in infrastructure, in particular ferries.

“Distilleries are often the biggest employer in a really tiny community. Getting to them has become so difficult in the past few years. The ferry infrastructure has been really challenging,” explains Healey-Ryder.

Looking forward to 2024, both Kent and Healey-Ryder mention ongoing negotiations between the UK and India, which could be resolved by the end of this year. “A trade deal could reduce the 150% tariff on Scotch whisky in India – which was the largest market by volume for Scotch whisky in 2022,” explains Kent.

However, Healey-Ryder anticipates a new issue on the horizon: “There is a growing demand for casks, which are typically coming from the US for the initial maturation. The industry has grown faster than the availability of casks.” He adds that a cask shortage would call into question whether Scotch should be redefined: “It’s defined in law that there’s a three-year initial maturation in oak. At what point is American white oak not available enough that that might need to change? That might not be next year, or within three years, or five – but there’s definitely pressure on cask availability.”

Click here to read our World Spirits Report for the vodka category.

Scotch brands to watch in 2024

Fettercairn

In 2024 Fettercairn celebrates its 200th anniversary, and the brand has already teased ‘big plans’ and new releases to mark the occasion. Its visitor centre will also reopen. This year, Emperador, which owns Fettercairn’s parent brand Whyte & Mackay, pledged a P7 billion Philippine pesos (US$125 million) expansion of its Scotch whisky production.

Rosebank Distillery

Following a 30-year closure, Rosebank Distillery completed its first distillation run this year. In 2024, its distillery will open to the public. Rosebank Distillery, located in Falkirk, Scotland, was mothballed in 1993. This year was all about recreating its former signature profile, but 2024 should see new heights for the brand.

Ardgowan

Another 2024 opening is Ardgowan, which will be Inverclyde’s first zero-carbon whisky distillery, costing the brand £20m (US$25m), and allowing it to produce up to one million litres of spirit annually. Last year, Ardgowan announced it had signed a £100m deal for a decades-long supply of Sherry casks, and hired The Macallan’s former master of wood.