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Modern outlook for old industry

Interview: Julie Hesketh-Laird, Scotch Whisky Association

 

Julie Hesketh-Laird
Julie Hesketh-Laird: opportunities (photo by Terry Murden – DB Media Services)

Getting a taste for Brexit opportunities

Anyone whose idea of Scotch whisky is one of wild moors and heather may be surprised to find its trade body headquartered in a glass-fronted suite of city centre offices.

The Scotch Whisky Association, which traces its roots back more than a hundred years, is these days portraying a modern image to the world.

Its move from the historic west end of Edinburgh to swanky offices in the Quartermile district means it rubs shoulders with some of the city’s technology pioneers such as the games company FanDuel and the search engine business SkyScanner.

Julie Hesketh-Laird, who led the relocation a year ago, is now its acting chief executive following the departure of David Frost to Boris Johnson’s Foreign Office.

She is the industry’s sword bearer, battling with governments around the world for a fair deal, usually on taxes, to ensure markets are opened for Scotland’s national drink.

While the working environment may have changed considerably, her in-tray is full of the same old issues – and a few new ones.

Minimum pricing of alcohol and fighting other countries over high taxes are among the legacy issues still to be tackled. Ms Hesketh-Laird, however, is the first CEO of the organisation in 40-plus years to be shaping the industry’s future outside the European Union.

Glenfiddich whisky“We are in the same boat as everyone else,” she says, shrugging her shoulders and admitting that so little detail has yet emerged in order to form any precise policies.

“At least we have the advantage of being an industry that is known around the world producing a product that we believe people will want to continue buying.”

SWA members voted to remain in the EU, but she says that the correct response to voting Leave means looking at how to manage the decision.

“The EU has given us a structure, in labelling, regulation and packaging, for instance. It has given us standardisation which means everyone works to the same rules and this has underpinned the industry.”

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“We have look at how best the new circumstances can work to our advantage”

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Even so, she says there are opportunities from being out of the EU. “The UK can negotiate bold and ambitious trade agreements without having to reach agreement first with the other 27 EU nations. Now we are out we can look at these discussions with fresh eyes.”

Does that mean members are actually quite relaxed about whether Britain is in or out of the EU?

“No, they definitely wanted to remain in the EU to provide continued certainty. But now we are coming out we have look at how best the new circumstances can work to our advantage.”

The industry is also keen to see how events unfold in the US under new President Donald Trump who is keen to pursue a protectionist regime. Again, she believes consumer demand will pave the way for a continuation of the status quo.

“I would not want to predict anything that is likely to happen in the US!” she jokes, adding that she has confidence that Mr Trump will see the benefits of retaining current trading arrangements with the UK.

“There is mutual trade in our sector and I don’t foresee difficulties between the US and UK,” she says.

Back home she says the industry is in good shape after a slump in exports in recent years. A report produced this week shows it creates £5 billion annually for the economy, supports more than 40,000 jobs and is the largest net contributor to the UK’s balance of trade in goods. New figures are due shortly and should point to further export growth.

“2017 is going to be a good year for Scotch. There is a lot of investment going on and new distilleries opening.”

Fourteen have opened in the last three years and seven more are due this year with as many as 40 in the pipeline.

While new ventures are important, she says that investment by the big players is the real sign of health in the sector.

Evens so, the SWA is leading calls for a further cut in excise duty. It wants a 2% cut and Ms Hesketh-Laird remains hopeful of a sympathetic hearing, although history is not in the industry’s favour. The 2% cut in the 2015 Budget was the first in almost 20 years and only the fourth time that excise on whisky had fallen in a century.

BenRiach whiskyIt followed the scrapping of the escalator in 2014 and came ahead of a freezing on duty last year. The escalator meant duty on alcoholic drinks increased by 2% above the rate of inflation every year.

“The fact that we still pay 77% tax on Scotch whisky continues to raise eyebrows, not least among politicians,” he says. She argues that other countries take their lead from the UK, making it more difficult to negotiate favourable tax rates with foreign governments.

She met Chancellor Philip Hammond during his trip to Edinburgh at the end of last year when he hosted a round table with a number of industry leaders, and she found him broadly in tune with the industry.

“He seems to get the importance of Scotch and its contribution to exports,” she says.

But politicians are not wholly onside with the sector. A long-running battle with the Scottish Government on minimum pricing is now with the Supreme Court.

A final judgement is expected in the summer on whether Scotch wins its campaign to halt the government’s legislation or whether ministers are allowed to introduce minimum pricing.

“We remain pretty upbeat,” says Ms Hesketh-Laird. “We believe minimum pricing is not the right way to tackle mis-use. It will be best addressed through education.”

Julie Hesketh-LairdPERSONAL CHECKLIST

Birthplace: Barton-on-Sea, Hampshire

Age: 45

Education: Royal Holloway, University of London (Biology and geography), Bournemouth University (Water management)

Career Highlights: First job was working as a policy adviser for the Water Services Association (now Water UK); senior policy officer, CBI; head of environmental policy, Chemical Industries Association; director of operational and technical affairs, Scotch Whisky Association; acting CEO SWA.

Are you a whisky drinker?

Yes. We used to come up to whisky festivals when I lived down south.

And your favourite?

Well, there are a few I haven’t yet tried.

Guilty pleasure?

I go caving. It’s fun to explore and find something new.

 



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