Benefit of open markets

Scotch whisky chief attacks protectionist trade policies

Karen Betts SWA

Karen Betts: ‘eliminating market distortions’ (pic: Terry Murden)


Scotch Whisky leader Karen Betts has taken a swipe at protectionist policies, arguing that the industry has been a “textbook example of the benefits of free trade”.

Mrs Betts, chief executive of the Scotch Whisky Association, said open markets and fairer trading conditions meant products from large and small producers were available around the world at competitive prices.

“Free trade is gradually eliminating market distortions and driving economic benefits for people everywhere.   Protectionism does none of these things,” she told the SWA’s members’ day in Edinburgh.

“So, in our view, industries and governments must stand up for free trade and the higher standards of living and greater consumer choice it has brought us.”

Giving a vision of the industry over the next 30 years, she said It followed that by 2050 the SWA would like to see a strengthened, rules-based world trading system, with the World Trade Organisation at its heart.

“By then, the WTO will have been through some necessary reforms to address its growing membership and the strains caused by global economic challenges that didn’t exist when it was first created.  We want to see a reformed WTO remaining the guardian of a stable, fair, global trading system, and a driver for global economic reforms that ultimately benefit ordinary people everywhere.

“By 2050, the WTO also will have helped us address some of the new opportunities of our future trade, such as agreed frameworks for e-commerce.”

In a message that may have been at least partly-targeted at guest speaker, the Finance Secretary Derek Mackay, but mainly at the UK Treasury, she added that governments need to ensure that taxes are sufficiently balanced to be effective, and that they are straightforward in the way they are administered.

“In short, set taxes too high and make them too complicated and you will damage our competitiveness.  We will be less able to compete well against products that pay less tax, for example French wine.  In the end, this risks our efficiency and productivity.

“This conversation about competitive rates of tax and excise is one we continue to hold with the UK government, not least as they consider the next Budget.”

Despite the challenges faced by the sector, Mrs Betts forecast that by 2050 Scotch Whisky’s global competitors – American whiskey, Irish whiskey, Japanese whisky and other global premium spirits – “will have done their best to knock us off our perch in the intervening years.  But they will not have succeeded.”

She said that Scotch whisky’s “consistency, quality, diversity and authenticity, alongside its heritage and its stories will win the day. Our industry’s skill in understanding the dynamic preferences of new and existing generations of consumers all over the world will be key to this.”

Peter Gordon, SWA chairman, reminded delegates that Scotch whisky’s share of the global whisky volume has decreased in the last five years.  “Whisky across the world has seen a significant increase in activity, most notably whiskies from America, Ireland and a resurgence of the interest in Japan,” he said.

He said Scotch’s share of global whisky volume has decreased from 26% to 23% and over that period Scotch volumes fell from 94.3 to 92.8 million cases.

“More importantly in terms of value, Scotch whisky’s share of the global whisky retail value decreased from 48% to 43%. This is despite the Scotch retail value growing from £25.5 billion to £28.8bn.”

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