What does this year hold for Scotch?
08 Jan 2018
We've said goodbye to 2017 and welcomed in the new year.
Now it's time to get back to work after a well-deserved break and
focus on what the next 12 months have in store for the Scotch
Last year was a good one for Scotch. Exports in our premium, craft
Scottish product returned to growth, with Single Malt exports
breaking £1 billion for the first time. Reflecting confidence in
the future, we saw unprecedented investment in the industry, with
new distilleries opening and older ones being given a new lease of
life. More people than ever visited the industry in Scotland, with
Scotch Whisky distilleries ranking among some of the most popular
Scottish and UK attractions.
But this industry knows it can never stand still so what are we
expecting for Scotch Whisky in 2018? Encouragingly, we saw signs
last year that growth in both value and volume of exports was
picking up. As the industry looks to the future, we are focusing of
the importance of sustaining global growth in the medium to long
Looking at performance in various markets, India is perennially
the market with the greatest potential. It is already our third
biggest export market by volume and our tenth by value, but Scotch
only has a 1% share of the Indian spirits market which shows
there is real scope to expand.. Post-Brexit, we want to see
an ambitious UK-India Free Trade Agreement (FTA) that, at the very
least, brought down the current 150% import tariff on Scotch.
Reducing this tariff would make a massive difference to exports of
Elsewhere, there has been strong growth in the volume and
value of Scotch exports to Singapore. It operates as a distribution
hub for Scotch exports to large parts of Asia so this increase
indicates strong demand across the region. South Africa is seeing
double-digit volume and value growth and we are also seeing strong
growth in exports to Mexico. In 2018, the industry will look to
build on these successes and open up new opportunities for
Clearly, the UK's post-Brexit trading arrangements will be central
to this endeavour. Brexit presents both challenges and
opportunities for Scotch. It will bring changes to the ways
in which we export and to how the industry is regulated, and the
sooner we know what these changes will be, the better.
The progress made in negotiations with EU partners at the end of
2017 which allowed trade talks with the EU to begin was welcome,
and the content of these discussions will be very important to
This year, it is vital that we hear more detail from the UK
government, particularly on a sensible period of transition,
customs procedures, the continuity of benefits secured through EU
trade deals, and protection of Scotch Whisky's geographical
The clock is ticking. The sooner details are forthcoming the
sooner the industry will be able to make plans and invest for the
In addition to Brexit, the domestic business environment is also
crucial to generating the confidence business needs to invest.
Despite the welcome duty freeze in the UK autumn Budget, £4 in
every £5 of what consumers pay for Scotch still goes straight to
the Treasury. Duty on Scotch Whisky is 19% higher per unit of
alcohol than duty on imported wine, and a staggering 327% higher
than on cider. We would like to see this unfairness addressed
by the UK Government.
There are 40,000 jobs, including 7,000 in the rural communities,
and £5bn of added value to the UK economy which depends on a strong
Scotch Whisky industry in our home market. In 2018, the domestic
business environment, including excise duty, must be seen through
the prism of the UK industrial strategy and the economic
contribution of Scotch and other UK manufactured spirits. We look
forward to continuing to discuss our place in the strategy with
Ministers in Edinburgh and London.
Over the years, the global success of Scotch has been built on the
hard work of such early entrepreneurs as Tommy Dewar, Johnnie
Walker, James Chivas and others in the 19th century who travelled
the world creating a huge global market for our national drink.
What we have seen in the early part of the 21st century is a new
generation of whisky entrepreneurs who are taking Single Malts and
premium blends to the modern consumer, following in the footsteps
of these industry giants.
This year presents a series of opportunities to support this new
wave of dynamism. If we can get Brexit right for Scotch both at
home and in our export markets around the world, the future for
Scotch Whisky , in 2018 and beyond, looks bright.
Karen Betts, SWA chief executive.