The Scotch Whisky Association (SWA) has urged the UK government to provide substantial support to Scotch producers amidst economic challenges.
- A significant tax duty increase on Scotch whisky last August has negatively impacted domestic markets, necessitating government intervention.
- Export values of Scotch whisky have decreased by 18% in the first half of 2024 compared to the same period in 2023, raising concerns over the industry’s stability.
- Despite high import tariffs, growth in India’s market highlights international opportunities that require strategic trade agreements.
- The upcoming UK Budget presents an opportunity for the new government to demonstrate its commitment to supporting the Scotch whisky industry.
The Scotch Whisky Association is calling on the UK government for decisive action to support Scotch producers, echoing promises made by Prime Minister Keir Starmer before the general election. This support is particularly critical in light of the recent 10.1% increase in duty on Scotch whisky, which the association deems damaging. The SWA is advocating for tax reductions during the upcoming Budget to mitigate this impact.
Newly released data from HMRC indicates a troubling trend: the export value of Scotch whisky fell to £2.1bn in the first half of 2024, marking an 18% decline compared to the same timeframe in 2023. Concurrently, export volumes dropped by 10.2%, equating to 566 million bottles. This downturn follows a previously record-breaking year in 2022, highlighting the volatility facing the industry.
Despite these challenges, there are growth opportunities in international markets, such as India, where Scotch whisky exports grew by 17.3% in the first half of 2024. However, these gains are overshadowed by a 150% import tariff, underscoring the urgent need for the UK government to finalise the UK-India Free Trade Agreement. The SWA projects that reducing these tariffs could boost export values by £1 billion over five years, benefiting both UK and Indian industries.
SWA Chief Executive Mark Kent emphasises the importance of government support, stating, ‘The prime minister has promised to back Scotch producers to the hilt.’ He notes that while the industry remains robust, current global volatility presents significant hurdles, not only for Scotch whisky but for premium exports worldwide.
The upcoming UK Budget on 30 October is viewed as a pivotal moment. Last year’s substantial tax hike—the largest in four decades—resulted in nearly £300 million in lost revenue for HM Treasury. The SWA argues that reversing this damage through duty cuts could strengthen public finances and support the Scotch whisky industry during these challenging times.
Swift government action could stabilise the Scotch whisky industry amidst current economic challenges.
