Steep decline in sales of Scotch whisky to the US and China have contributed to an overall drop in exports.
Overseas sales fell 7% year on year to £3.95bn on volumes down 3%, according to figures published today (1 April) by the Scotch Whisky Association (SWA), which called on the EU and future UK government to pursue “ambitious” Free Trade Agreements to promote exports. The SWA said existing arrangements such as the EU agreement with South Korea had boosted growth.
The SWA said the decline – following flat value sales in 2013 – had in some areas been a result of political volatility and changes in stock levels rather than reduction in underlying consumer demand.
Sales to biggest export market the US had fallen 9% to £748m. But the SWA claimed this was down to a stock adjustments - as high inventory levels of Scotch were reduced rather than new stock bought in – as well as an increasingly competitive spirits market. It added that consumption figures released earlier this year by the US Distilled Spirits Council showed the market had shrunk by only just over 1%.
And exports to the major regional hub of Singapore fell 39% to £200m, partly down to the ongoing austerity campaign in China, said the SWA, with direct exports to China down 23% to £39m
But growth had been seen in important markets such as Taiwan (+36%), India (+29%), Japan (+8%) and France (+2%), said the association. Emerging markets showed a mixed picture, with value down in Mexico and Brazil, but up 27% in the United Arab Emirates.
“Economic and political factors in some important markets held back Scotch Whisky exports in 2014 after a decade of strong growth,” said SWA chief executive David Frost. “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.”