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India is bright spot for Scotch as exports tank
Value exports of Scotch whisky in the first half of 2024 fell by 18% compared to the same period last year, as success in India proves the only silver lining.
Value exports were £2.1 billion in H1 2024, having fallen my almost a fifth compared to the same period in 2023, according to figures released today by the Scotch Whisky Association (SWA).
Figures from 2023 were already down on 2022, a year which saw record exports for Scotch whisky, and the first half of 2024 is a continuation of this retraction.
The volume of exports also fell, though less starkly than in value terms. Volume were down 10.2% in the first half of this year, to the equivalent of 566m 70cl bottles – or 36 bottles of Scotch Whisky exported each second, compared to 40 bottles per second in the first half of 2023.
The US remains the largest global market by value in the first half of 2024. However, Scotch exports to the country continue to feel the impact of the 25% tariff on single malt Scotch whisky levied between October 2019 and March 2021. The tariffs are estimated to have cost the industry £600m in lost exports and market share.
The bright spot, then, is India. The largest market for Scotch whisky by volume, India has bucked the trend set in other large export markets, recording growth of 17.3% in the first half of 2024 compared with the previous year. This is despite the current 150% tariff on imports remaining in place.
The SWA has used the latest results to call on the UK government to double down on efforts to tie up a UK-India Free Trade Agreement which would see tariffs cut over time. The phased reduction of the tariff would benefit industries in both the UK and India and could see the value of Scotch whisky exports grow by £1bn over five years, according to SWA calculations.
Mark Kent, SWA chief executive, said the figures had “not come as a surprise given the volatile international situation affecting global industries and inflationary pressures which have fed through to consumers across global markets”.
He continued: “the H1 figures clearly show that our biggest market, the US, has not fully stabilised following Covid and the damage caused by the 25% tariff on single malt in the US. The permanent elimination of this tariff, going beyond the current five-year suspension, would remove uncertainty, give the industry increased confidence and allow our full focus to be on growing in this highly competitive spirits market.
“It is welcome that the UK government has picked up negotiations on a UK-India trade agreement. Exports to India have been a bright spot in the first half of 2024, despite the current 150% tariff being a brake on future growth. Securing a deal which reduces the tariff would be a major boost to the industry and help to mitigate the impact of a slowdown in other global markets.”
Kent called on the UK government for support to “ease the industry through short term volatility”. He said: “The UK Budget on 30 October is the first opportunity for the new Labour government to show it truly supports Scotch. Last year’s double-digit tax hike on Scotch Whisky in the UK, the largest in 40 years, has already lost HM Treasury almost £300 million in tax revenue. Beginning to reverse the damage by cutting duty on Scotch Whisky will boost public finances and bolster the industry through this challenging period.”
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The government absolutely has to listen to the industry. Tax on whisky is totally unjustified, its effecting the retail beyond words.
As for India the government needs to understand Indian markets and the people. There is already a problem with alcoholism and Britain must not add to the problems that already exist.