Scotch Whisky Exports Drop

Exports of Scotch whisky dropped 7% last year amid weaker economic conditions and political volatility, new figures show.

They fell to £3.95 billion in 2014, down from £4.26 billion the previous year, according to figures released today by the Scotch Whisky Association (SWA).

However, the group said the long-term outlook remains strong, with the overall picture showing consolidation in many developed markets and underlying strong growth in most emerging markets.

Exports were up 27% to £116 million in the United Arab Emirates while in Taiwan they rose by 36% to £197 million and India saw a 29% increase to £89 million.

In Mexico, exports by volume grew 5% to 42.8 million bottles while value fell by 10% in the market. There was a similar trend in Brazil, with volumes flat but value down 20%.

Global exports performed better in the second half of last year - down 4% - than in the first six months when they fell 11% in value compared with the same period in 2013, suggesting longer-term fundamentals are sound, the SWA said.

The organisation called on the European Union and the future UK government to continue to press the case for more open markets and to pursue ambitious free trade agreements (FTAs) to promote exports.

SWA chief executive David Frost said: Economic and political factors in some important markets held back Scotch whisky exports in 2014 after a decade of strong growth.

It shows that the industry's success cannot be taken for granted and that we must continue to argue for more open markets and ambitious trade deals that tackle barriers to market access.

The long-term fundamentals remain strong, with consumers in emerging markets wanting to buy Scotch whisky as a high-quality and authentic product with a strong reputation and clear provenance.

This drives the strong investment in Scotch whisky production in Scotland and the significant interest in entering the sector.''

The SWA pointed to existing FTAs, such as the European Union agreement with South Korea, which have boosted growth and to the huge potential'' of agreements with countries including India, the US and Vietnam.

The organisation said there was an encouraging picture in Europe last year, with exports to France, the biggest market by volume and second biggest by value, up 3% to 183 million bottles and 2% to £445 million.

It said the French market is stabilising after Scotch, and other imported drinks, were hit by a tax increase in 2012.

Exports to Spain were up 1% by volume for the first time in several years, according to the figures, which were taken from Her Majesty's Revenue and Customs (HMRC).

Exports to the US, the biggest market for Scotch, fell 9% by value to £748 million.

However, consumption figures released earlier this year by the US Distilled Spirits Council show the market shrank by only just over 1% while single malt sales volumes were up 6.3%.

The SWA said this suggests that the fall in exports in 2014 was due partly to stock adjustments - as high inventory levels of Scotch are drawn down to meet consumer demand, rather than buying new stock - as well as to an increasingly competitive spirits market.

Last year, 1.19 billion bottles of Scotch whisky were exported, down from 1.23 billion bottles the previous year.