Scotch whisky exports fall by 7%

Scotch whisky exports fall by 7%

Scotch whisky exports declined from £4.26billion in 2013 to £3.95billion in 2014.

The Scotch Whisky Association says the 7% drop is due to weaker economic conditions and political volatility in some markets.

The volume of exports also dropped 3% to 1.19 billion bottles, from 1.23 billion bottles the previous year.

Exports to the USA, the biggest market for Scotch, fell 9% to £748million, according to customs export figures. However consumption figures from the US Distilled Spirits Council suggest the market shrank by just 1%.

The SWA says this suggests the decline in exports over the year could be attributed in part to stock adjustments, as high inventory levels of Scotch are drawn down to meet consumer demand, rather than buying new stock. It also says it could be due to the increasingly competitive spirits market.

Exports to the major regional hub of Singapore fell by 39% to £200million. The Association says this was partly due to the continuing austerity campaign in China, the final destination for a lot of Scotch shipped from the UK to Singapore. Direct exports to China, the 26th largest market by value, fell 23%.

As a result of political and economic volatility, the SWA says there was a “mixed picture” in emerging markets. Exports by volume to Mexico grew 5% to 42.8 million bottles, while value fell by 10% in that market. Similarly in Brazil, volumes lay flat while value dropped 20%.

However the Association are hopeful about the longer-term fundamentals of the industry, noting that exports performed better in the second half of the 2014 – down 4% – than in the first six months of the year where they fell 11% compared to the same period in 2013.

Growth was seen in a range of markets, such as Taiwan where exports jumped 36% to £197million, which the SWA says is “partly on the back of the growing popularity of Single Malt Scotch.” It also notes that exports to India were up 29% to £89million.

The Association also says the picture in Europe over the year was “encouraging.” Exports to France, the biggest market by volume and second-largest by value, rose 2% to £445million and 3% to 183 million bottles. The organisation says the French market is stabilising after imported drinks were hit with a tax increase in 2012. It also noted that exports to Spain were up 1% for the first time in “several years.”

The SWA is calling for the EU and future UK government to press for more open markets and pursue Free Trade Agreements to promote exports. It says there are a number of on-going negotiations which should benefit Scotch Whisky, including the EU-Vietnam FTA, an agreement with Colombia and Peru due to come into force, and an agreement with Canada.

David Frost, Scotch Whisky Association chief executive, said: “Economic and political factors in some important markets held back Scotch Whisky exports in 2014 after a decade of strong growth.

“It shows that the industry's success cannot be taken for granted and that we must continue to argue for more open markets and ambitious trade deals that tackle barriers to market access.

“The long-term fundamentals remain strong, with consumers in emerging markets wanting to buy Scotch Whisky as a high-quality and authentic product with a strong reputation and clear provenance.

“This drives the strong investment in Scotch Whisky production in Scotland and the significant interest in entering the sector.”

By |2015-04-01T08:45:04+00:00April 1st, 2015|Aberdeen, Business News, Dundee, Highland, Lothian, National Story, Strathclyde, Uncategorised|Comments Off on Scotch whisky exports fall by 7%

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