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Scotch exports value up but volume drops

Published:  29 October, 2017

Scotch Whisky exports increased by 3.4% in the first half of the year to £1.8 billion, according to HMRC figures published today by the Scotch Whisky Association (SWA).

The value growth was driven by the increasing popularity of Single Malts across the globe - up 7% to £479 million in the first six months of the year, with Single Malts now making up more than a quarter of the value of all Scotch shipped overseas.

The US - the industry’s largest export market, continued to lead the way with exports up 8.6% to £388 million, and the value of Single Malts jumping 14% to £123 million.

Scotch exports to mature and emerging markets also increased. There was a marked return to growth in China – up 45% to £27 million, while exports to Japan grew 19% to £43 million.

The European Union (EU) remains the biggest regional destination for Scotch with the value of exports up 4% to £559 million, almost a third of the total.

The positive figures however masked more concerning underlying trends as volume sales declined, said the SWA, adding the lower volume and higher value was partly as result of the shift to Single Malts.

The SWA said a strong home market was required to underpin the industry’s global success and that Chancellor Philip Hammond could help next month by cutting tax on an average bottle of Scotch from an onerous 80%.

Calling on the government to support the industry and help it “grasp the opportunities and keep this international success going”, chief executive Karen Betts, said: “Overseas demand for our quality product requires investment by the industry in the UK and that needs government support - a strong domestic platform for growth is vital and the Chancellor could take a step in the right direction in next month’s Budget by cutting the tax on an average priced bottle of Scotch.

Scotch remains Britain’s biggest food and drink export, making up almost a fifth of the sector’s overseas shipments.

But the Scotch Whisky industry needs support to sustain growth in the long term, not least as it manages the impact of Brexit, said Betts.

Overall, the volume of whisky shipped overseas was down 2% to 528 million bottles, and this was in the context of relatively favourable exchange rates.

Some markets declined in the face of continuing economic and political headwinds, such as Brazil where the value of Scotch exports fell 20% to £22 million.

Recent figures show that the UK market has shrunk as excise duty has increased, with a near 4% hike in the March Budget seeing Scotch sales fall by 1 million bottles in the first half of 2017.