LONDON: Scotch whisky exports continued to fall last year, but at a slower pace than before as the industry shows signs of recovery.
Global exports of Scotch fell 2.4% last year to £3.86 billion ($5.56 billion) amid declines in France. Still, the decline was a marked improvement from the 7% fall the industry endured in 2014 as Scotch lost market share to bourbon, according to U.K. government data analyzed by the Scotch Whisky Association trade group.
Scotch grew strongly for a decade, driven by emerging markets, but growth slowed sharply in 2013 due to currency fluctuations, market slowdowns and political instability. Recently, lower commodity prices have hit exports to markets like Brazil, Russia and some African countries.
“Challenges remain, with an uncertain global economy and political uncertainty in some export markets,” said David Frost, chief executive of the association.
By volume, Scotch exports fell 2.8% last year to 1.16 billion bottles. Declines in France and the U.S.—respectively the largest and second-largest Scotch markets by volume—outweighed rises in countries like Mexico, Australia and Japan.
Blended Scotch whisky, which incorporates whiskies made in multiple distilleries, made up 72% of exports by value and volume last year. The category has been losing share to single malts, made at only one distillery, which now make up close to 25% of Scotch exports by value, up from 18% five years ago.
Scotch makers have a lot to lose should Britain choose to leave the European Union in a June 23 referendum, the Scotch Whisky Association said. Roughly 40% of Scotch volumes shipped globally were exported to the EU last year, according to the association, which has argued that belonging to the union is vital for increasing exports.
“Continued EU membership will also help to support Scotch whisky exports to the single market and would leave Scotch well placed to benefit from the lower tariffs and fairer market access that the EU has been able to secure through its negotiation of free-trade agreements with countries around the world,” Mr. Frost said.
