Whisky Exports Recover, But Below Pre-COVID Level
Scotch whisky sales to Europe, the USA and beyond have improved this year. Although the news is promising, there is more ground to recoup. Subdued by events, total exports are less than before the Coronavirus pandemic hit markets hard last spring.
Read how the scotch whisky export market has grown in 2022: Scotch whisky exports are up 37% in 2022
Reduced retail during 2020
Even when COVID-19 lockdowns and restrictions eventually eased, hostelry traders still suffered reduced takings. On-premises liquor consumption had stopped altogether for a few months before it resumed gradually.
In the UK and mainland Europe, precautionary measures meant restricted opening hours, with limitations on seating and customer numbers. Fortunately, online sales to overseas trade and retail customers helped prop up turnover during this challenging period, as well as home deliveries in the domestic market.
Early this year (2021), British exporters faced an extra administrative workload after the UK left the European Union. Initially, many companies had to deal with multiple regulations and delayed shipments before the complex situation began to ease.
In contrast, sales to Asia continued to rally, in line with growth from the previous autumn. In particular, the value of exports of scotch whisky to China rose to £91 million during the first half-year. This unprecedented achievement is all the more impressive when one considers that in 2019, the twelve-month total amounted to £89 million.
Turning to the transatlantic market, exports to the USA exceeded $1 billion in 2019. The USA continues to be the biggest overseas customer for Scottish distilleries. Still, an import tariff of 25 per cent on single malts caused sales to plummet by around a third. In 2020, the value of finished liquor shipped to North America fell to $729 million.
This year, takings still seem to be down when compared to the equivalent quarters of 2019. Industry commentators expect any recovery following the pandemic and (now suspended) import tariffs to take time, patience and investment initiative.
Understandably, whisky producers have called for measures to support their industry. Speaking on behalf of the Scotch Whisky Association (SWA), CEO Karen Betts lamented the lowest exports in a decade. However, she saw some hope in the latest figures, even though international sales had yet to bounce back fully. Also, the cost of global services and transport continued to rise throughout the supply chain.
Mrs Betts pointed out that Scotland’s distilleries contribute more than £5.5 billion to the UK economy. Significantly, the industry directly employs over 10,000 people and supports the economic activity of around a further 40,000 workers.
Turbulent trading conditions added impetus to the SWA’s request for the UK government to complete its much-awaited review of alcohol excise duty. In addition, Betts underlined the need for the government to honour its manifesto commitment concerning the tax treatment of scotch whisky compared to other types of alcohol. As it turns out, she plans to leave her post at the head of the SWA later this year, so it will likely fall to her successor to continue pressing for change.
Finally, on a global note, a reduction of India’s whopping 150 per cent tariff on scotch had to be a top priority in forthcoming trade negotiations.
UKV International AG’s primary business centres around acquiring, supplying, and selling bonded whisky.
We supply for consumption and or investment depending on our client’s requirements and offer a brokerage service for those who wish to sell investment-grade whiskey held in UK regulated bond.
We are here to assist you with choosing which whisky to invest in and to guarantee your cask is put away accurately and safely. Regardless of whether you will drink, gift or sell your whisky.
To find out more, contact us here.