Brazil – a market with potential

16 Dec 2016

We learned a great deal during our first visit to Brazil earlier this month, but three pieces of advice rang especially true: "the people are friendly", "Brazil is not straightforward" and "everything is negotiable".

The first became immediately obvious when, a few hours after landing, a stranger was translating for us in a restaurant. It was also evident during our meetings with the Institute of Intellectual Property and the Ministry of Foreign Trade, to name just two of the agencies we saw, to discuss better protection for Scotch Whisky.

We also received a warm welcome from both the Brazilian Association of Alcoholic Drinks (ABRABE) and the Cachaça Producers Association (IBRAC). The Scotch Whisky Association has just signed a Cooperation Agreement with IBRAC, and this was celebrated at a St Andrews Day Reception at the British Embassy in Brasilia. Mark Prisk MP, UK Trade Envoy to Brazil, was guest of honour. Our Scotch Whisky quiz was met with enthusiasm and a surprising level of competitiveness. Did you know that the original owner of the world's largest private collection of Scotch Whisky was Brazilian? Claive Vidiz is the collector and the bottles are now on display at the Scotch Whisky Experience in Edinburgh.

We also soon realised that Brazil is not straightforward and getting around the bustling cities of Sao Paulo and Rio presented us with some minor challenges. Politically it is also a complicated place with regulation at Federal, State and Municipal levels. In 2015, Scotch Whisky worth £56 million was exported to Brazil making it the 17th largest global market by value and while still impressive, this is down on previous years. From speaking with Scotch Whisky distributors in the market, this is well below its potential.
A combination of economic and political issues, along with high taxation and complex regulation make it difficult to enter the market. Our application to have Scotch Whisky recognised as a geographical indication has been delayed due to some technical provisions of Brazilian law. Despite all of this our members appear determined to grow their businesses and we were impressed with the visibility of Single Malt Scotch Whisky in some of the shops.

Finally, we saw at first-hand how negotiation is part of Brazilian life, when the concierge at our hotel revealed he had a "friend" who could drive us where we needed to go for a price. It was also the case that Brazilian officials were prepared to think creatively about how we could pick our way through the complex regulatory framework. We returned home with a number of ideas on how we might achieve our legal and policy aims in the country.

Brazil is a wonderful country that loves Scotch Whisky but there remain a number of issues that need to be dealt with before it can become a true success story for the industry. Nevertheless, the Brazilians are great people to deal with and we at the Scotch Whisky Association look forward to working with them over the coming months and years to help Scotch grow.

Siobhan Sellers, head of Americas, and Lindesay Low, senior legal counsel, at the SWA