SWA calls for support
Overseas whisky sales fall despite growth of malts
Single malts continue to see growth against an overall decline in overseas sales
A growing taste for single malt whisky could not halt a fall in overall sales of Scotch overseas in the first half of the year.
Total Scotch volumes fell by 2% despite favourable exchange rates. Income was boosted 3.4% by customers switching to higher-priced single malts.
The wobble in total sales has encouraged industry leaders to call for further support, including a cut in excise duties in next month’s Budget to underpin growth at home.
Scotch remains Britain’s biggest food and drink export, making up almost a fifth of the sector’s overseas shipments.
The analysis of official HMRC figures by the Scotch Whisky Association (SWA) today shows the growing popularity of single malts with exports up 7% to £479 million. Single malts now make up more than a quarter of the value of all Scotch shipped overseas.
This trend is evident in the US where total Scotch exports were up 8.6% to £388m and single malts jumped 14% to £123m.
Scotch exports to many other mature and emerging markets increased. There was a marked return to growth in China – up 45% to £27m as the country’s economy grows – and exports to Japan expanded 19% to £43m.
The European Union (EU) remains the biggest regional destination for Scotch with the value of exports up 4% to £559m, almost a third of the total.
But the Scotch Whisky industry says it needs support to sustain growth in the long term. Overall, the volume of whisky shipped overseas was down 2% to 528m bottles.
Some markets declined in the face of continuing economic and political headwinds, such as Brazil where the value of Scotch exports fell 20% to £22m.
The SWA argues that a strong home market is required to underpin the industry’s global success and that Chancellor Philip Hammond could help next month by cutting tax on an average bottle of Scotch from an “onerous” 80%.
Recent figures show that the UK market has shrunk as excise duty has increased, with a near 4% hike in the March Budget seeing Scotch sales fall by one million bottles in the first half of 2017.
One of the SWA’s priorities for Brexit is domestic reform to improve competitiveness, including changes to the current excise duty system.
Karen Betts: “the figures mask more concerning underlying trends’
Karen Betts, SWA chief executive, said: “The value of Scotch whisky exports was up more than 3% in the first half of this year to £1.8bn, which is great news.
“More and more consumers around the world are seeking out the fabulous range of Single Malts. It is good to see demand for scotch increasing in a diverse range of mature and emerging markets around the world.
“But the figures mask more concerning underlying trends. The value of exports is up but the volume is down. With the changes Brexit will bring to the way the industry operates and trades, we need the support of the UK Government at home and overseas if we are to grasp the opportunities and keep this international success story going.
“Overseas demand for our quality product requires investment by the industry in the UK and that needs government support.
“A strong domestic platform for growth is vital and the Chancellor could take a step in the right direction in next month’s Budget by cutting the tax on an average priced bottle of Scotch from the staggering level of 80%.”