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Record export growth for Scotch

Value rose 4.4% to £4.9bn while volume increased 2.4% in 2019, according to the latest HMRC export data.

Export growth was driven in particular by Asia and Africa, with value increases of 9.8% and 11.3% respectively, but growth was recorded in more than 106 of Scotch’s global markets.  

Single malt had its best year to date, reaching £1.5bn for the first time and seeing double-digit value growth for the fourth year in a row.

By volume, 2019 was also the best year yet for blended Scotch exports, accounting for 89% of all Scotch exports, beating 2011's previous volume record at 327.8 million litres of pure alcohol. 

However, the Scotch Whisky Association (SWA) warned the 25% tariff on the import of single malt Scotch whisky and Scotch whisky liqueurs into the US means the outlook for the industry remains uncertain, particularly given that this tariff could rise.

While the US remained the Scotch whisky industry’s most valuable market in 2019 - up 2.7% to £1.07bn, export volume fell by 7%, with a marked difference in the final quarter of the year when exports to the US fell 25%. 

 “The growth of developing markets in Africa and Asia shows that Scotch Whisky continues to bring new consumers to our globally renowned brands.

 “However, the imposition of a 25% tariff on exports of single malt Scotch whisky and Scotch whisky liqueurs to the US is very concerning, and the 25% fall in exports to the US in the fourth quarter of 2019, immediately following the implementation of tariffs, is stark,” said Karen Betts, CEO of the SWA.

At the end of last month, whisky industry bodies on both sides of the Atlantic  issued a joint call for their respective governments to stop using tariffs on whisky as a proxy battle in unrelated trade disputes.

The SWA was continuing to press the UK government to put in place a support package for distillers to help mitigate the impact of tariffs, including a cut in excise duty in next month’s budget which would allow distillers to re-invest in the UK market while sales are under pressure in the US, she added. 

 “The tariffs are hitting producers hard, particularly small distillers. Some are now asking themselves how they can continue exporting to the US, whether they can build up alternative markets, which is not something that can be done quickly, and if not how their businesses will cope.”

The EU imposed a 25% import tariff on American whiskey in June 2018 after the US imposed tariffs on European steel and aluminium. The US placed the same tariff on imports of single malt Scotch whisky in October 2019 as part of its decades-long trade dispute with the EU over state subsidies in the aircraft manufacturing sector.

Prior to these developments, the two industries had thrived in a tariff-free trading environment for a quarter of a century.