Scotch Whisky sector demands support amid export slump

The Scotch Whisky Association has called on the government to provide additional support to the industry following a slump in exports.

The Scotch Whisky industry is a major contributor to the UK economy. The Scottish Whisky Association (SWA) states that the industry is worth £7.1bn annually and supports 66,000 jobs across the UK, mainly in Scotland.

Yet, exports fell to £2.1bn in the first half of 2024 from £2.6bn in the same period last year. 

Volume also declined, with 36 bottles of whisky sold every second in the first half, compared to 40 bottles in 2023.

In the run-up to the election, Sir Keir Stamer pledged to “back Scotch producers to the hilt” adding that “the industry isn’t getting the stability it needs from the Tories and SNP”. 

Last year, as part of a major review of alcohol tax, Scotch was subject to a double-digit hike in alcohol duty. The Scotch Whisky Association estimated the hike had cost the government almost £300m in lost tax revenue due to lower sales. 

Cutting such taxes would both increase revenue, and reduce the tax burden on the industry, making it a win-win for the Chancellor.

Commenting on export figures in the first half of 2024, SWA Chief Executive Mark Kent said: “The Prime Minister has promised to ‘back Scotch producers to the hilt’. These figures are a reminder that the success of Scotch Whisky cannot be taken for granted and requires government support to ease the industry through short term volatility.”

“We are a resilient industry, exporting to over 180 markets, and are experienced in navigating such periods of turbulence, and we are confident of the long-term growth opportunities for Scotch Whisky.” 

“But it is clear that the first half of 2024 has been challenging, as for other premium global exports. This has not come as a surprise given the volatile international situation affecting global industries and inflationary pressures which have fed through to consumers across global markets.

The SWA urged the new Labour government to tackle several key issues to protect the industry from further harm. The sector requested a reduction of the 10.1 per cent increase which was implemented in August, hoping for its announcement at this year’s Autumn Budget on 30 October. 

The SWA also called for the government to expedite the UK-India free trade agreement. Exports to India jumped 17.3 per cent in the first half of 2023 compared to that of the previous year, despite the 150 per cent tariff recently placed on imports. 

The report shows that if this tariff were removed, the value of Scotch Whisky exports could grow by £1bn over the next five years.

The Artisanal Spirits Company (ASC) also communicated their disappointment on the industry’s slowdown in China earlier this year.