Global

11 Sep 2013

There are over 650 barriers in 120 export markets. Tackling such barriers is critical to the future of the industry and to the Scottish and UK economy.

Mission

The Scotch Whisky Association's Global Affairs Department (GAD) strives to ensure Scotch Whisky can be sold without undue restriction and on equal terms with all other spirit drinks worldwide.

Principal Activities

  • Promoting, supporting or opposing legislative or other trade related measures affecting Scotch Whisky
  • Pursuing the removal of tariff and non tariff barriers to trade
  • Providing a market information service to members

Scotch Whisky as an aspirational drink

The growing popularity of Scotch Whisky is driven by the emergence of a more affluent middle class in many developing economies around the world. 

Consumers in Africa, Asia and Latin America, in particular, see Scotch as an aspirational product, with which they celebrate their economic and social success.

It is therefore unsurprising that all the Association's priority markets are among the fastest developing countries globally:

  • Brazil
  • China
  • Colombia
  • India
  • Korea
  • Mexico
  • Russia
  • Taiwan
  • Thailand
  • Turkey
  • India

India

The Indian whisky market at 150 million 9 litre cases is the largest in the world but Scotch Whisky accounts for just 1% of total whisky consumption, mainly as a result of the exorbitant import duty of 150% applied by the Government of India.

Added complications for Scotch Whisky exporters arise from India's federal structure. Responsibility for alcoholic drinks is devolved to individual states in India, creating in effect 28 separate markets each with differing regulations, taxes and restrictions. Securing improved market access to India is the Association's number one trade priority.

Brazil

Brazil is a top ten export market, despite Scotch Whisky representing only 3% of the local spirits market. As the economy continues to expand, the market offers significant future potential.

But export growth is being held back by complex and discriminatory tax arrangements, a 20% import tariff and intellectual property and regulatory challenges. EU-Mercosur free trade talks may offer an opportunity to make progress on these issues.

Russia

It is difficult to do business in Russia. The industry faces a wide range of trade barriers and potential future restrictions. 

Challenges include issues around the licensing and strip stamp regimes, import notification and intellectual property protection. 

The Scotch Whisky Assocation is seeking a more transparent operating environment, with imports treated in a non-discriminatory manner in line with Russia's new WTO commitments.  Direct and indirect exports of Scotch Whisky combined are estimated at over £130m a year making Russia the industry's seventh largest export market in value terms.

China

With direct and indirect exports combined reaching an estimated value of £100 million in Customs value alone, the rapidly growing Chinese market is now among the industry's top ten worldwide. 

Locally produced spirits falsely labelled and sold as 'Scotch Whisky' attempt to cash in on this success. As elsewhere, this is a major issue both for the industry and Chinese consumers. 

The Chinese government has been supportive in tackling the issue. The registration of 'Scotch Whisky' in China as a Geographical Indication of Origin in late 2010 really improved the SWA's ability to protect against counterfeit of this kind by taking legal action.  The SWA had already secured the registration of 'Scotch Whisky' as a collective trade mark. 

The reputation of the whisky category as a whole suffers when, as also happens in China, inferior spirit is sold as 'whisky'. The SWA is pursuing the introduction into Chinese legislation of a high quality definition of whisky in line with EU/international standards.