30 new distillery projects on drawing board

Whisky leaders on alert over EU and productivity

David FrostScotch whisky leaders today expressed concern over Scotland’s level of competitiveness and Britain’s potential exit from Europe.

Threats also came from the health lobby and from overseas markets where sales have fallen.

But those attending a gathering in Edinburgh said they had confidence in the industry’s ability to meet the challenges it faced and they heard that as many as  30 distillery projects were under consideration.

David Frost, chief executive of the Scotch Whisky Association, said there was “no complacency, but no misplaced gloom, either.

“We are continuing to grow. There are huge investment flows from established producers. Last year six new distilleries saw spirit flow for the first time and we’ve already seen another this year. We are aware of 30 or more projects for new distilleries. We haven’t seen anything like this for many years.”

However, “the battle is never ending,” he added. He said the health issue remained central to the reputation of the sector, but he was confident that the SWA would win its legal challenge over minimum pricing.

“Minimum pricing is still out there and the legal case is unresolved and controversial,” he told the 180 delegates.

“Other territories are taking up the idea, but the case is with the European court which is where we wanted it to be. We are confident in our case and we look forward to vindication in the next 12 months.”

Addressing the health issue, Fraser Thornton, managing director of Burn Stewart, said: “We are more active than the tobacco industry.”

Speaking about the industry’s competitiveness and export potential, Mr Thornton said: “We have built this fantastic platform for ourselves. The fundamental challenge for the industry is how we maintain what we have built.”

He said the industry was benefiting from greater availability of credit because of the normalising the banks, as well as from low interest rates and low inflation. “It is a great time to borrow,” he said.

Paul Lewis, managing director of international operations at Scottish Enterprise, encouraged the industry to continue innovating in order to capitalise on its worldwide reputation, while James Withers, chief executive of Scotland Food and Drink, said devolution had been “the best thing for a generation”. This was because food and drink was four times more important to the Scottish economy than to the UK as a whole.

Ross Martin, chief executive of the Scottish Council for Development and Industry, sounded a note of caution by warning that Scotland’s export performance falls well behind other nations and regions. “Our export performance is pretty anaemic,” he said, adding that productivity was 20% below the OECD communities.

“We perform well below our competitors,” he said, but he urged the Scotch industry to shout about its successes. “We need to be loud and proud about our whisky,” he said.

On the European issue there was a view across the hall that the EU needed reform, with little appetite for Britain pulling out.

Julie Hesketh-Laird, the deputy CEO of the SWA, said: “We gain a huge amount from being in Europe and despite the complexity of the rules we face from Brussels we have learned to understand them. Any change would create huge uncertainty.”


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