Food

Whisky exports increase to £1.8 billion – but volume shipped overseas drops

Scotch whisky exports increased by 3.4 per cent to £1.8 billion in the first half of this year.

The sum – $2.4billion – was boosted by the popularity of single malt, according to a report from the Scotch Whisky Association. Single malts now make up more than a quarter of the value of all Scotch shipped overseas.

The US experienced the largest growth with total Scotch exports up 8.6 per cent to £388m and single malts up 14 per cent to £123m.

According to the report, Scotch exports also returned to growth in China – up 45 per cent to £27m and in Japan, which reported a 19 per growth to £43m.

The EU remains the biggest regional destination for Scotch with the value of exports up four per cent to £559m, almost a third of the total.

Whisky exports increased by 3.4 per cent to £1.8 billion between January and June this year

Whisky remains Britain’s biggest food and drink export, making up almost a fifth of the sector’s overseas shipments.

The Scotch whisky industry needs support to sustain growth in the long term, the SWA has said, particularly after the impact of Brexit.

However, the volume of whisky shipped overseas was down two per cent to 528m bottles, within the context of moderately favourable exchange rates. The lower volume and higher value is partly as result of the shift to single malts.

Following the near four per cent hike in the March budget, whisky sales fell by one million bottles in the first half of 2017

The figures also showed that some markets declined due to continuing economic and political headwinds, including Brazil where the value of Scotch exports fell 20 per cent to £22m.

The SWA argues that a strong home market is required to underpin the industry’s global success and that Chancellor Philip Hammond could help by cutting tax on an average bottle of Scotch from an onerous 80 per cent this month in his Budget.

Support at home would also encourage long-term confidence and underpin continued investment in the industry and supply chain that, in turn, relies on export success.

The figures also follows the near four per cent hike in the March budget, which saw Scotch sales fall by one million bottles in the first half of 2017.

Charles Ireland, Diageo’s general manager for Great Britain, Ireland and France, says a rise in spirits duty in the November budget could lead to a further decrease in Scotch whisky sales.

Charles Ireland, Diageo’s general manager for Great Britain, Ireland and France

He said further duty increases could negatively impact sales of Scotch In the run up to the forthcoming budget, and said: ‘Our modelling shows there would be a negative impact on the strength of the market at home.

‘The spirits market suffered a downturn when the last increase happened earlier this year and there would be another downturn if the tax increased in the next budget.’

Charles is the latest to join calls to Drop the Dram Duty and said he thought any duty increases would have both a domestic and international impact on the industry.

Diageo is one of the largest producers of Scotch whisky, operating 29 distilleries across Scotland. According to Diageo, a tax hike of this kind would be ‘counter productive’ as the treasury’s takings from Scotch fell below the Chancellor’s predictions following a 3.9 per cent spirits duty increase.

Over 40,000 people in the UK work for the whisky industry, with Diageo employing over 5000 people.

Original Article

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