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Scotch contributes £7bn to UK economy

Published:  16 January, 2024

The Scotch Whisky industry contributes more than £7bn to the UK economy, a report has found.

According to the Scotch Whisky Association (SWA), sales contributed £5.3bn to the Scottish economy and £1.8bn in the rest of the UK in 2022, marking a 29% increase since 2018.

It means Scotch accounts for £3 in every £100 of Scotland’s gross value added (GVA), second only to energy in economic stature north of the border.

Mark Kent, chief executive of the SWA, said: “The Scotch Whisky industry has once again proven its economic significance to the UK domestically and on the world stage, and these figures highlight the importance of backing a key sector for productivity, exports and employment.

“The past five years have been turbulent for our sector, as we faced retaliatory tariffs in the United States, in addition to the global pandemic and the knock-on economic pressures. The Scotch Whisky industry has remained resilient, with capital investment directed towards fulfilling our collective sustainability ambitions, creating world-class visitor attractions, and building more distilleries that will help boost jobs and growth.

“Ahead of the UK Spring Budget on 6 March and this year’s General Election, it is vital that the industry is supported by the government so that businesses can continue to invest in the UK economy.”

The report also found that the industry performs a crucial role in driving productivity across Scotland. The manufacturing of beverages in Scotland – dominated by Scotch – produces £273,000 GVA per employee. Comparatively, the industry is second only to the energy sector (including renewables) at £279,000 per head (in 2019).

According to the SWA, the industry supports 66,000 jobs across the UK, of which 41,000 are in Scotland.  

However, the sector is now warning that while there is room for further growth, Scotch whisky continues to face multiple barriers, including the highest spirits duty rate in the G7, key infrastructure in Scotland in need of investment, and trade deals – including with India – still to be finalised. These challenges combined with rapidly increasing competition from premium spirits in global markets put future investment, growth and jobs at risk without government support.

Scottish secretary Alister Jack said: “I welcome this report which demonstrates the great strength and resilience of the Scottish whisky industry. The sector’s contribution to the economy, with ever-growing exports and investment in skills and jobs, is of vital importance to Scotland, and the whole of the UK.

“The UK government wholeheartedly supports the industry. Scotch is not just Scotland’s but the UK’s most valuable food and drink export and that’s why we’ve given it 10 cuts or freezes in duty at the last 11 Budgets, as well as removing punitive tariffs imposed on the US market.

“We are pushing forward with new and robust global trade agreements that will continue to safeguard the interest of Scotch whisky, ensuring that the unique characteristics and reputation of Scotch are protected.”