Single Malt Whiskies Set to Undergo Huge Price Rise Next Year Due to Supply Chain Crisis
According to experts, single malt whiskies may triple in price over the next year due to the worst supply chain crisis in the industry’s history. Brexit, the pandemic, and a huge demand for whisky have all joined together to pose serious problems for the whisky industry.
The whisky industry is not suffering from a shortage of supply or demand; rather, the current issue lies with whisky’s journey to reach the market.
The Impact of Brexit on the Whisky Industry
Brexit has disrupted the efficiency and cost-effectiveness of several supply chains, and the introduction of tariffs, customs duties, and other trade barriers are expected to have significant implications in the future.
Whilst Brexit has affected supply chains across many industries, Scotland’s £5billion whisky export market is one of the worst to be hit. With distilleries struggling to meet global demand, the aftermath of Brexit is forecasted to lead to years of price rises.
The reasons for this supply chain crisis are multifold: there is a shortage of HGV drivers, a lack of containers on (over-subscribed) ships, and the ports are subsequently jammed with a backlog of goods. As well as suppliers struggling to transport goods from third-party warehouses – leading to longer lead times – staff shortages also mean that unloading ships takes longer and causes further delays.
What Is the Whisky Industry Saying?
Some of the most prominent figures in the whisky have been very vocal about the detrimental impact that this supply chain crisis has had on their businesses. Dawn Davies, head buyer at The Whisky Exchange, stated: “Everything along the supply chain is taking about three months if it’s coming from anywhere that’s not Europe and even in Europe in some cases.”
She added: “Demand is outstripping supply. For older whisky, over 20 years, some of the prices are tripling next year. That could mean a £100 bottle costing £300 and for the younger stuff, you are looking at about nine per cent rises. Suppliers aren’t coping, bonded warehouses aren’t coping, the customs and imports authorities aren’t coping.”
Andrew Symington, owner of Edradour Distillery in Perthshire, said “Our online sales went through the roof over lockdown and demand continues to be really strong – people were drinking more and they wanted better quality stuff. But the supply chain problems really are reaching crisis point. It is a nightmare for the industry – distilleries are phoning each other asking for supplies. We are having trouble getting hold of bottles, corks, cardboard.”
So… What Is Going to Happen?
In terms of the short-term impacts of the supply chain crisis, champagne, wines, and gin are also facing extensive delivery delays, thus igniting fears of a potential drought over the Christmas period.
In order to remedy this situation, vacancies will need to be filled. Whether the solution is training British nationals or allowing for greater freedom of movement, it is unlikely that the issue will be solved any time soon.