UK whisky exporters are set to benefit from a £250m trade boost over the next five years after Keir Starmer confirmed tariffs on exports to China would be halved to 5%.
The tariff deal, signed during the PM’s visit to Beijing on Thursday, would help Scottish distillers in particular to “compete more effectively in one of the world’s fastest-growing consumer markets”, the government said.
However, detail on when the reduction will come into force is yet to be disclosed.
The move will bring export tariffs for UK whisky to China back down to the rate imposed before February 2025 – when it doubled its existing levy to its standard most-favoured-nation rate of 10%, as part of a wider package of tariffs imposed on European countries linked to ongoing geopolitical tensions.
It comes as the Chinese market for British whisky has shrunk in recent years. Data published last February by the Scotch Whisky Association showed that scotch exports (which make up the vast majority of UK whisky exports) slipped by 31.5% to £161m in 2024 – with China falling from the UK’s fifth biggest scotch export market to tenth.
Scotch Whisky Association CEO Mark Kent welcomed the tariff announcement, saying China was a “priority growth market for many scotch whisky producers”, with the country having developed into “a knowledgeable and premium focused market with a strong appreciation of scotch”.
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The tariff cut “has the potential to re-energise exports of scotch to this important market”, he added. “We are very grateful to the prime minister and officials on both sides for this welcome development and look forward to working with the UK government on the rapid implementation of the tariff reduction.”
Recently appointed Diageo CEO Dave Lewis described the move as “good news”, with the tariff reduction “helping us as we build our iconic brands like Johnnie Walker with Chinese consumers”.
Scotland’s first minister John Swinney also hailed the agreement as “welcome news”, adding there was a “clear demand for high-quality produce in the Chinese market, one that Scotland is well placed to fulfil with our world-famous food and drink”.
The announcement additionally raised the prospects of an export resurgence from other parts of the UK, suggested Stephen Davies, CEO of Welsh distiller Penderyn.
The brand had “done a lot of good business with China” in recent years, before market conditions became “very difficult” about two years ago, Davies said. “We had substantial business for both branded and bulk sales into China at that time, but we found that in the past few years demand has declined significantly.”
Whisky is the UK’s largest food and drink export, with overseas sales worth £5.5bn in 2024 and volumes up 3.5% year on year, according to HMRC data. Scotch exports represented £5.4bn of that figure, according to the Scotch Whisky Association.
The agreement came amid a first visit by a UK prime minister to China in eight years, as part of a wider push by Keir Starmer to improve relations with the country. His meeting with president Xi Jinping also brought an agreement for visa-free travel to China for UK citizens, plus investment deals for British businesses.
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“Having already slashed tariffs on whisky exports to India, we’re now doing the same with China – proof that our pragmatic, hard-headed international engagement brings benefits at home,” Starmer said.
“The world today is undergoing both changes and turbulence,” Xi added. “China and Britain, as permanent members of the United Nations Security Council and major economies, should enhance dialogue and co-operation in order to maintain world peace and stability, while promoting the economy and people’s livelihoods of both countries.”
The tariff agreement, “combined with broader progress on trade facilitation, services partnerships and enhanced market access discussions, signals a renewed and pragmatic UK-China economic relationship that directly benefits our members”, said Barney Mauleverer, chair of the Food & Drink Export Association.
“It’s an exciting time for British food and drink innovation to reach more Chinese consumers, driving growth, supporting jobs across the UK supply chain and reinforcing our industry’s global competitiveness,” he added. “I’m really optimistic that this momentum can continue to unlock further opportunities too.”
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