September 22, 2014 – Scotch Whisky exports fell 11 percent during the first six months of 2014 from the same period in 2013, according to new figures released today by the Scotch Whisky Association. The total value of Scotch Whisky exports for the period was £1.77 billion GBP ($2.89 billion USD), down from £1.99 billion in 2013, based on data from HM Revenue & Customs. The decline is being blamed on several factors, including economic uncertainty in several key markets, government austerity measures in China, and the strength of the British Pound on currency markets.
In a news release, Scotch Whisky Association officials described the downturn as a “leveling off” of demand, while remaining optimistic about the industry’s long-term future. SWA chief executive David Frost said “we are confident that Scotch Whisky will continue to grow in the long-term as markets stabilise and new ones, such as emerging economies across Africa, open up. However, it is clear that in the short-run that there are economic headwinds affecting exports. The latest figures also act as a reminder that the success of Scotch Whisky can’t be taken for granted. We need support from government to beat down trade barriers and help us access new markets overseas.”
The announcement comes days after Scottish voters rejected a break with the United Kingdom, a position that received tacit support from the SWA and stronger support from several industry members. SWA executives and corporate leaders had suggested that an independent Scotland might face problems joining the European Union immediately, with the potential to lose tariff-free export status with key European trading partners. As an example, today’s SWA report cited continued growth in France, where the value of exports grew by 6 percent during the first six months of 2014 to £211 million GBP ($345 million USD), cementing France’s place as the second-largest export market for Scotch Whisky behind the United States. France is the top-ranked market by volume, with 86 million bottles of Scotch Whisky exported to France during the reporting period.
Scottish Cabinet Secretary Richard Lochhead said in a statement that “Scotch whisky is an iconic product, though I recognise is not immune from wider current economic difficulties across the globe. I welcome the industry’s confidence in the long term future of Scotch Whisky, and its continued commitment to £2 billion of capital investment in Scotland.”
Exports to the US dropped sharply during the period, with a 16 percent drop in value to ¢327.7 million GBP ($536 million USD) and a 12 percent drop in volume to 54.7 million bottles. China’s anti-extravagance campaign led to declining imports of Scotch Whisky, with Brazil, Mexico, and Singapore also reporting declines. Singapore is significant because it serves as a regional transfer hub for shipping, and much of the whisky shipped through Singapore is destined for other Asia-Pacific markets. It should be noted, though, that some of that traffic may have been routed through the United Arab Emirates, where Dubai has become another major transfer point for shipments to Asia, Africa, and India. Exports to the UAE rose 54 percent during the period to an estimated £54 million GBP.
Other markets reporting gains in export value included Taiwan (39%), India (31%), Japan (18%), Canada (5%), and Australia (4%).
Links: Scotch Whisky Association