Single malt boosts Scotch whisky exports by 3.4% in first half

The value of Scotch whisky exports increased by 3.4% in the first half of the year to £1.8 billion, driven by sales of single malt whisky, but the Scotch Whisky Association (SWA) has warned the industry needs to brace itself for the impact of Brexit.

Scotch exports increased by 3.4% in value in the first 6 months of the year, but volumes fell 2%

In the US, Scotch exports grew 8.6% to £388 million, while the value of single malt exports jumped 14% to £123m. There was also a marked increase in China, where exports shot up by 45% to £27m, and in Japan, whose market for Scotch whisky grew by 19% to £43m. Some markets fared less well, such as Brazil where the value of Scotch exports fell 20% to £22m.

Overall, the European Union (EU) remains the biggest export market for Scotch, with a value of £559m – up by 4% – almost a third of the total exports from the region.

The single malt category now makes up more than a quarter of the value of all Scotch shipped overseas, with exports of this category up 7% to £479 million in the first six months of this year, according to HMRC figures.

But while the category appears in good health in terms of export value, volumes of Scotch shipped overseas were down 2% to 528m bottles, with the “lower volume and higher value” partly a result of the shift to higher value single malts, the SWA said.

Brexit will be a major challenge to the ongoing success of Scotch, with the SWA arguing that a strong home market is needed to underpin the industry’s global success, calling for Chancellor Philip Hammond to cut tax on an average bottle of Scotch by 2%, from an onerous 80%.

Recent figures show that the UK market has shrunk as excise duty has increased, with a near 4% hike in the March Budget which saw Scotch sales fall by 1m bottles in the first half of 2017.

A cut in duty would help encourage “long-term confidence” and underpin continued investment in the industry and supply chain, the SWA argues.

“The value of Scotch Whisky exports was up more than 3% in the first half of this year to £1.8 billion, which is great news,” said Karen Betts, SWA chief executive. “More and more consumers around the world are seeking out the fabulous range of Single Malts. It is good to see demand for Scotch increasing in a diverse range of mature and emerging markets around the world.

“But the figures mask more concerning underlying trends. The value of exports is up but the volume is down. With the changes Brexit will bring to the way the industry operates and trades, we need the support of the UK Government at home and overseas if we are to grasp the opportunities and keep this international success story going.”

“Overseas demand for our quality product requires investment by the industry in the UK and that needs government support. A strong domestic platform for growth is vital and the Chancellor could take a step in the right direction in next month’s Budget by cutting the tax on an average priced bottle of Scotch from the staggering level of 80%.”