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Scotch Whisky export records broken

In 2018 the USA became the first £1bn export market for Scotch whisky. That in itself is interesting but we thought we would put together a few more facts in infographic form, which you can see above, to demonstrate all you need to know about Scotland’s most iconic export.

Scotch whisky exports to the USA hit a record high, topping £1.04bn in 2018. This follows the wider growth trend for Scotch whisky globally with international exports of whisky also experiencing a record year hitting £4.7bn in sales, an increase of 7.8% from last year. This is part of a growing trend stretching back several years and translates to 41 bottles of whisky being exported from Scotland every second.

Food and drink is one of Scotland’s ‘key growth sectors’. The global appeal of Scotch whisky is strong and increasing, with Scotch now being exported to more than 170 markets worldwide. Scotch whisky actually now accounts for roughly 20% of all UK food and drink exports.

The EU is vitally important to Scotch exports, with EU nations purchasing 30% of the total value of whisky exports. This is a major concern for the continued growth of Scotch whisky exports, as there is still no trade deal agreed between the UK and the EU. Free and unrestricted trade with the EU doesn’t look likely to happen for Scotland as part of the UK after Brexit, even if a no-deal Brexit is avoided. 

The EU provides (through its trade agreements with the rest of the world) Scotch whisky with a protected geographical indicator status. This means that only whisky produced in Scotland is allowed to be called Scotch whisky. This prevents foreign produced whiskey (with an e) from benefiting unfairly from the quality associated with real Scotch whisky. As a result of the UK’s exit from the EU, this protection may be under threat, allowing imitation Scotch to benefit from Scotland’s global appeal. 

So all Scotch whisky must be produced in Scotland and, therefore, 100% of Scotch exports (regardless of the port of exit from the UK) are identified and included in the Scottish Government’s export figures. 

The whisky sector’s success offers a great boost to the Scottish economy, directly employing 10,000 people in Scotland. But it also supports around 30,000 jobs in the UK throughout the supply chain. Unfortunately many whisky company headquarters, such as Diagio, are in London in order to be close to the locus of political power in taxation and duties.  Therefore many of the high-value jobs such as sales, marketing and finance have left Scotland. 

It is hard to see how Scotland as an independent nation would have seen the ownership and high-value jobs associated with one of its most important export sectors stripped away to another country, as the power to regulate and tax the industry would have remained in Scotland.  It would also be likely that, in the case of independence, the locus of power in the industry would naturally move away from London and back to Scotland which would provide a boost for the economy.

The combination of a potential lack of post-Brexit trade deals and access to the single market would seriously hamper the export growth the sector has enjoyed in recent years. The potential loss of Scotch whisky’s protected brand status would also be disastrous, as it would have to be renegotiated on a nation-by-nation trade deal basis at a time when countries want to help their own whiskey companies exploit Scotch’s premium brand.

The Scotch whisky industry is just one example of the success and intrinsic value of the Scottish brand globally and provides yet another compelling reason to believe in Scotland.

 

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About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland he ran a small social media and sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and The Huffington Post.

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