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Scotch Whisky 'unaffected' by global credit crunch

Published:  23 July, 2008

Scotch Whisky Association set to reveal "impressive export growth for Scotch Whisky in the coming months, Paul Walsh said.

In his first major speech as the chairman of the Scotch Whisky Association, Diageo chief Paul Walsh told delegates at the World Whiskies Conference: "At the moment we are not seeing any major reaction in our markets to developments in the banking sector.

"When industry figures for 2007 are announced, I would expect them to reveal continued impressive export growth for Scotch Whisky, despite the well documented credit crunch of the second half of the year and the early part of 2008."

He warned the whisky industry, however, not to get complacent as consumers may have had a "delayed reaction" reacting to events. "We cannot rule that out," he said.

"My own feeling is that the significant markets in which we operate are no longer as tightly wired to events in the United States as once they were.

"I've also said before that premium spirit drinks are an 'affordable luxury' for consumers and the trends at present appear to bear this out.

"It also perhaps demonstrates that the international spread of Scotch whisky with exports in nearly two hundred markets also helps to mitigate against individual market or regional fluctuations."

Walsh said the SWA estimates that over 400million capital investment was announced in 2007 on new distilling, bottling and warehousing capacity which is scheduled to come on-stream over the next three years

Scotch exports rose 4 to nearly 2.5billion in 2007, despite ongoing disputes over import tariffs in several emerging markets.

However, the industry continues to face some 450 barriers to trade in its markets around the world including from undue restrictions on marketing and promotions.

Walsh said the SWA is currently seeking to secure better legal protection for Scotch whisky in China, Russia and other emerging markets.

It is also hopeful of securing a positive outcome at the World Trade Organisation Doha trade talks.

He also warned India that it would return to the WTO to secure fair market share access in line with international trade rules if it failed to provide a level playing field at state level.