SWA demands trade certainty
Distillers ramp up deliveries overseas to beat Brexit deadline
Distillers want more clarity on trade deals
Whisky distillers have been making early deliveries of stock to overseas buyers to counter any negative impact of a No Deal Brexit.
Ramping up deliveries has bumped up already impressive sales figures but have prompted the Scotch Whisky Association to demand the UK government provides greater certainty in trading arrangements post-Brexit.
The value of Scotch Whisky exports increased by 10.8% to £2.19bn in the first half of 2019, while the volume of exports increased by 7.1% to 598m 70cl bottles, according to HM Revenue & Customs figures.
Single Malts continue to grow in popularity, with exports up 18.8% to £652m in the first six months of the year. Single Malts now make up 30% of the value of all Scotch shipped overseas. Exports of Blended Scotch Whisky grew too, rising 7.5% to an export valuation of £1.35bn.
While growth in exports underscores Scotch Whisky’s enduring popularity with consumers around the world, the SWA believes that a proportion of this year’s export growth also reflects actions taken by a number of distillers to mitigate the risk of a no-deal Brexit in March/April by exporting some stocks early, evidenced by a spike in EU exports in Q1.
Therefore, the figures reflect the uncertainty in future trading conditions that the industry is currently facing.
The EU saw a 27.9% growth in value and 14.5% rise volume in Q1 compared to 2018 when they dropped by 13.2% and 20.5% respectively. This reflects shipments ahead of the 29 March Article 50 deadline.
Shipments to South Korea increased by 25%, and exports to Morocco increased by 74% in the first half of the year, again reflecting forward shipping ahead of potential tariffs following Brexit.
The SWA has also warned that the industry faces tariffs on exports to some key global markets after Brexit, plus a rise in excise tax built into HM Treasury’s budget plans which affects Scotch Whisky sales in the UK and the industry’s tax treatment in export markets.
Karen Betts: uncertain trading environment (pic: Terry Murden)
SWA Chief Executive Karen Betts said: “It is great news for distillers, their employees and the communities in which we work – as well as for all the other businesses that work with the Scotch Whisky industry – to see exports of Scotch continue to grow.
“Demand for Scotch Whisky is growing both in developing markets, like India, and in established ones like the US, Japan and Germany. This reflects the enduring popularity of Scotch Whisky in so many cultures around the world. It also reflects our industry’s continued focus on improving trading conditions – for example, removing tariffs and discriminatory taxes – across our global markets.
“However, these figures also bring to life the uncertainties in today’s challenging trade environment.
“The value of exports grew more than anticipated in the first six months of 2019. We believe this was driven by action taken by producers to mitigate the risks of a no-deal Brexit and the threat of tariffs in key global markets.