UK Drinks Exports Surpass £9.4bn in 2023 Boosted by Whisky Exports Worldwide
In a spirited turn of events, whisky sales have propelled UK drinks exports to an impressive £9.4 billion, marking a 13% surge in the year ending the 31st July 2023. This surge, detailed by charted accountant and business advisor Hazlewoods, highlights the significant role played by spirits, particularly Scotch whisky, in elevating the nation’s beverage exports.
Key Factors Driving Growth
The report from Hazelwoods highlights two key areas that have impacted growth:
- Traditional Markets: The continued demand for Scotch whisky in established EU markets, including France, Germany, Spain, and Poland, contributed significantly, with exports to the single market nearing £1.6 billion.
- Brexit Impact: However, the report also notes the challenges faced by more perishable and lower-margin drinks, such as beer, in the EU due to Brexit-related red tape.
Heritage Brands and Global Appeal
Rebecca Copping, Associate Partner at Hazlewoods, emphasised the success of British heritage brands positioning themselves as luxury offerings in the global drinks market. Young affluent consumers, seeking status and success, are driving this success. The US remains a pivotal market for Scotch, surpassing £1 billion in sales in 2022, while countries like India and Singapore have witnessed a sharp uptick in Scotch whisky imports.
Luxury Boom and Future Outlook
Copping attributes part of the export boom to a post-COVID surge in luxury goods sales, maintaining resilience despite a slowing growth trajectory. With Scotch whisky leading as the UK’s single largest food and drink export, the Scotch Whisky Association aims to add another £1 billion in exports over the next five years.
Key to sustained growth is a potential UK-India free trade agreement that addresses barriers, including a 150% tariff on Scotch whisky imports into India. Another key area in Asia is South Korea, which saw a record of whisky imports in Q1 of 2023.
Government Role and Industry Focus
Copping concluded by highlighting the need for UK government support through trade agreements across the world that reduce barriers, fostering industry expansion. While whisky spearheads the export surge, it’s also a success story for UK drinks brands specialising in gin and other spirits.
The government increase in alcohol duty hit the whisky industry in August 2023. However, the announcement that there would not be another increase in alcohol duty tax until at least Autumn 2024 was a welcome one. This announcement will allow the industry to continue to grow production and export more Scotch whisky worldwide.
The allure of heritage, coupled with luxury branding, continues to attract consumers, particularly in emerging markets like India and Singapore. As the industry sets its sights on untapped markets, the focus remains on long-term growth and collaboration.
When is the Right Time to Invest?
When will the trade deals between the UK and Asian countries happen? That is up to the UK government. But, what we do know is that once the trade borders are open whisky will experience rapid growth.
If you would like to be at the forefront of this trend whisky investment has been one of the fastest-growing alternative investment opportunities in the world.
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