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Future of Scotch Whisky "sound", SWA says, but it warns of turbulent Scottish politics

Published:  28 April, 2015

The Scotch Whisky Association has insisted that the long term fundamentals for Scotch are "sound" and well-placed to return to growth once the economies of its export market strengthen

The Scotch Whisky Association has insisted that the long term fundamentals for Scotch are "sound" and well-placed to return to growth once the economies of its export market strengthen. 

In its annual review, chairman Pierre Pringuet of Pernod Ricard and Chivas Brothers, said the 7% decline in the value of Scotch Whisky exports during 2014 should be viewed within the context of "strong global growth over the past 10 years. "The total value of our exports up 74% since 2004 and Single Malt exports up by 159% in the same period," he said.  

Chief executive David Frost said the year had been "challenging" and the Scottish independence referendum had "dwarfed"most other issues, adding that the SWA's campaign had generated "significant media exposure"  for the SWA. He welcome the economic stability following the vote but warned that Scottish politics remained "turbulent". 

"Developing relationships and impact in this fast-changing environment will be a vital task for 2015" he continued.  "By building strong relationships with all levels of government and opinion-formers and by making a visible impact on the public debate."

He said the plans to open a satellite London office overseen by a new global affairs director supported by a team of five, would build on the SWA's strong relationship with Westminster. "Only by building up a strong constituency for Scotch Whisky outside as well within Scotland will we be able to maintain a supportive environment for the industry as a great Scottish and British asset," he said.

Political and economic headwinds made 2014 a "challenging" year, he admitted and had impacted exports, but the underlying trends were "strongly" in the SWA's favour. "Emerging markets continue to grow, which means we can be confident about future demand for Scotch whisky," he said, noting that confidence was driving investment, with six new distilleries opening during 2014, other expanding capacity and around 30 potential new entrants into the market.

He pointed out the demand this put on both maturation capacity and raw materials. "Ensuring long-term supply of barley is vital to us and that is why the Association has encouraged the emerging plans for a UK Centre for Barley Excellence," he said. "If established, this should provide a unique platform for the translation of barley research into commercial results and establish the UK as an internationally recognised centre for skills in barley research."

The Scotch whisky industry currently sources around 88% of its barely from within Scotland.

Earlier this month, the SWA reports exports of Scotch Whisky fell 7% to £3.95m on the back of weaker economic conditions and political volatility in some markets. 

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