US first to become a billion-pound market for Scotch

Official figures from HM Revenue and Customs (HMRC) have revealed a strong year for Scotch Whisky exports in 2018, with the US also becoming its first overseas market to hit the billion-pound mark.

In 2018, the export value of Scotch Whisky grew by 7.8% in value to a record £4.7bn

In 2018, the export value of Scotch Whisky grew 7.8% by value to a record £4.70bn, with the previous record high £4.37bn in 2017.

The number of 70cl bottles exported also reaching record levels growing to the equivalent of 1.28bn, up +3.6%, with the previous record for export volume set in 2011 at 1.264bn 70cl bottles.

Karen Betts, chief executive of the Scotch Whisky Association, said: “These figures underscore strength of the Scotch Whisky category, which has continued to grow despite the challenges posed by Brexit and by tensions in the global trading system.”

This growth was driven largely by the US market, which crossed the billion-pound mark by value for the first time in 2018, rising in value from £921.7m in 2017 to a record £1.04 billion (an increase of 12.8%) in 2018. It remains the biggest export market by value for Scotch.

The The EU remains the largest region for exports, accounting for 30% of global value and 36% of global volume.

“A key driver for global growth is the growing market for premium spirits,” added Betts. “Scotch Whisky is in a great position to take advantage of this given its unrivalled reputation for quality, authenticity and provenance.”

Blended Scotch declined by 4.7% to £3.04bn, but there was further growth in exports of single malt Scotch, which grew by 11.3% in 2018 to £1.30bn.

The biggest gains by value were seen in India, which increased by 34% to £138.8m, followed by Mexico, which increased the value of its Scotch imports by 18.5% to £131.5m. Losses by value were recorded in Germany (down 5.3% to £173.9m, and Spain (down 2.6% to £170.4m).

By volume, France remains the biggest export market for Scotch, importing 187.8m bottles in 2018 (a rise of 5.3%), followed by the US with 136.8m (+7.4%). Both Germany and South Africa saw a decline in volumes of 18.3% and 19.5% respectively.

Despite overall growth across the board, Betts offered a word of caution, acknowledging the difficulties that could lie ahead as the UK’s deadline for leaving the EU approaches.

“We operate in a competitive global marketplace and so a competitive business environment in Scotland and across the UK is vital to Scotch Whisky‘s success,” said Betts.

“For Scotch, that means fair and balanced regulation and taxes, including excise duty, to give distillers the confidence to invest in future growth. We also want to see the UK and EU agree to an open and positive future relationship, which delivers frictionless trade with the EU, and the UK to secure ambitious trading relationships with key markets around the world.

“In that context, it is important to our industry, as to many others, that the UK does not leave the EU without a deal at the end of March. We are urging the government and Parliamentarians to work together constructively and pragmatically to ensure that an agreement is reached as quickly as possible.”

The largest export destinations for Scotch Whisky (by value) in 2018 were:

1 United States, £1,039.5m, +£117.8m, +12.8% (£921.7m in 2017)

2 France, £442.1m +£8.5m, +2.0% (£433.6m in 2017)

3 Singapore, £319.9m +£29.2m, +10.0% (£290.7m in 2017)

4 Germany, £173.9m -£9.8m, -5.3% (£183.7m in 2017)

5 Spain, £170.4m -£4.5m, -2.6% (£174.9m in 2017)

6 Taiwan, £168.4m +£8.0m, +5.0% (£160.3m in 2017)

7 UAE, £146.9m +£17.1m, +13.2% (£129.8m in 2017)

8 India, £138.8m +£35.3m, +34.1% (£103.5m in 2017)

9 Mexico, £131.5m +£20.5m, +18.5% (£111.1m in 2017)

10 Latvia, £129.8m +£9.5m, +7.9% (£120.4m in 2017)

The largest export destinations for Scotch Whisky (by volume) in 2018 were:

1. France, 187.8m, +9.4m, +5.3% (178.4m bottles in 2017)

2. United States, 136.8m, +9.4m +7.4% (127.5m bottles in 2017)

3. India, 112.6m +23.1m, +25.9% (89.5m bottles in 2017)

4. Mexico, 59.8m +6.3m, +11.9% (53.4m bottles in 2017)

5. Spain, 55.0m -5.7m, -9.5% (60.8m bottles in 2017)

6. Japan, 50.5m +16.7m, +49.5% (33.8m bottles in 2017)

7. Germany, 45.6m, -10.2m, -18.3% (55.8m bottles in 2017)

8. Singapore, 44.5m, -2.1m, -4.5% (46.6m bottles in 2017)

9. South Africa, 41.8m, -10.2m, -19.5% (52.0m bottles in 2017)

10. Brazil, 38.9m, +2.7m +7.5% (36.2m bottles in 2017)

In 2018, Scotch Whisky exports by global region (defined by value) were:

European Union: £1,392.0m, +1.4% (30% of global exports)

North America : £1,260.3m, +12.9% (27% of global exports)

Asia and Oceania: £1,127.5m, +15.0% (24% of global exports)

LatAm & Caribbean: £368.4m, +9.5% (8% of global exports)

MENA: £274.6m, +4.8% (6% of global exports)

Africa (Sub-Saharan): £158.2m, -8.2% (3% of global exports)

Western Europe (non-EU) £84.7m, -10.8% (2% of global exports)

Eastern Europe (non-EU) £30.8m, +30.1% (1% of global exports)

Grand Total £4,696.6m, +7.8% (100% of global exports)