A year in whisky
with an Asian country. Scotch Whisky – the largest UK exporter to Korea – is set to be one of the biggest beneficiaries of the deal which eliminates Korea’s 20% import tariff on spirits. The growth in exports is providing a much-needed boost to
the UK economy through Scotch Whisky tourism. New tourists are deciding to come to Scotland having discovered a taste for Scotch. Research we commissioned from 4-consulting this year revealed that visitor centres and distilleries add £30.4 mil- lion in value to the economy and provide 640 jobs – direct and indirect. Spending by tourists is creating wealth for the country and cultural clusters are forming around production areas which are benefiting from a “distillery effect”. However, there is no room to rest on our laurels and break-
ing down barriers to trade in India is top of our to-do list. India is the world’s largest spirits market but Scotch Whisky has a very small share. This is largely down to an import tariff of 150% applied to international brands. Ongoing free trade negotiations between India and the EU provide an opportunity to offer Indian consumers variety and choice, at an affordable level, for the first time. The Scotch Whisky industry is also building on its long-
standing ‘green credentials’ and great progress is being made in meeting the ambitious targets set in its environmental strat- egy, such as sourcing 80% of its energy from non-fossil fuels by
£267.6m £233.7m £219.5m £194.1m £148.5m £116.2m £90.2m £97.2m £70.3m £65.8m £48.4m £76.1m £65.5m £52.8m £62.1m £50.7m £44.8m £28.7m £41.9m £32.5m
January - June 2011 January - June 2010
2050. Already, 98% of packaging used is recyclable or reus- able against a 2020 target of 100%. The industry is spending an unprecedented level of investment on production capacity. Continuing buoyancy of the market and optimism about the future has led to over £1 billion of new capital investment over the last five years. The continuing success story of Scotch Whisky makes the
Scottish Government’s commitment to a policy that can only cause detriment to the industry all the more disappointing. It is pushing ahead with plans for a minimum unit price for alcohol, despite evidence showing this approach is unlikely to be effec- tive in tackling misuse. We also believe that any such scheme would be illegal as it would breach European Union trade rules. Another big concern is that overseas countries would use the scheme as a justification for introducing their own trade barriers which would damage our exports – and inevitably the entire Scottish and UK economy. We are arguing for a more effective and fairer alternative, in collaboration with the UK Government, of introducing a floor price for alcoholic drinks based on duty and VAT and a change in the current duty regime which sees Scotch Whisky taxed more heavily than other drinks. Scotch Whisky is an industry to be proud of and we should
all be doing what we can to ensure it continues to grow and be a credit to Scotland throughout the world.
Top ten export markets by value (January - June 2011)
USA +14%
France +13%
Singapore +64%
Spain -16%
TOTAL EXPORTS FOR JAN - JUN 2011: £1,797.2m 94.8m 80.2m 60.3m 56.0m 29.8m 21.8m 29.6m 32.0m 24.2m 19.2m
January - June 2011 January - June 2010
23.3m 18.4m 22.5m 15.2m 19.6m 16.6m 18.8m 16.1m 14.7m 17.4m
Taiwan +45%
South Korea -13%
South Africa +24%
Germany +22%
Brazil +56%
TOTAL EXPORTS FOR JAN - JUN 2010: £1,476.1m Top ten export markets by volume, 70cl bottles (January - June 2011)
UAE +29% TOTAL +22%
France +18%
USA +8%
Singapore +36%
Spain -8%
TOTAL EXPORTS FOR JAN - JUN 2011: 569.3m
www.whiskychallenge.com
India +26%
Germany +27%
Brazil +48%
South Africa +18%
TOTAL EXPORTS FOR JAN - JUN 2010: 476.8m
Thailand +17%
South Korea -15%
TOTAL +19% 5
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