PARIS: The volume of Scotch whisky exports rose for the first time in three years in the first half though the value of exports was down, new industry figures show.
The figures, compiled by industry trade body the Scotch Whisky Association (SWA) suggest the volume of exports rose 3.1 per cent in the first half to 149 million litres of pure alcohol – equivalent of 533 million 70cl bottles shipped.
However the value of exports dipped one per cent to £1.7 billion, which the SWA suggests points to a “slowing in the rate of decline we saw in 2015” when the overall value of whisky exports dipped 2.4 per cent against a fall of seven per cent in 2014. Volume exports in the first half of 2016 rose across single malt, blended and bulk export, with single malt accounting for nine per cent of overall exports by volume but 25 per cent of the total value.
The SWA said the growth of single malt “reflects the continued movement towards premiumisation”. Single malt exports rose three per cent year on year to 49 million bottles equivalent and by six per cent in value terms to £431 million.
Blended whisky, which accounts for the bulk of overall exports, increased 10 per cent in volume terms to 362 million bottles equivalent but declined four per cent in value terms year on year to £1.16 billion.
Bulk exports rose 10 per cent to 122 million bottles equivalent and rose five per cent in value terms, though no value figure is provided.
The SWA said the value of exports overall was up 2.8 per cent at the end of May, but then fell in June.
The report states while it “remains to be seen whether this is sustained or reverses out in the rest of 2016”, the devaluation of sterling following the UK’s vote to leave the EU is “likely to have a positive effect on exports over this period”.
The report states: “Effectively importers of Scotch Whisky will be able to purchase the same volume of products at a lower (domestic) price.
“While the impact of other factors, such as trade negotiations and domestic economic performance should not be ignored, the exchange rate impact should offer some positive conditions for exporters to offset to some degree other disruptive factors in the market.”
France remains the largest export market by volume, with 90.9 million bottles shipped in the first half and the USA remains the largest market by value, accounting for £357.4 million of the £1.7 billion overall value of exports in the first half.
France was the second largest market by value and the USA the second largest by volume. The growth of exports to India also stood out, with value up 28 per cent to £43 million, despite what the SWA describes as an “exorbitant” 150 per cent basic customs duty in the country.
SWA chief executive, David Frost, said: “The first half of 2016 was marked by an improving Scotch Whisky export performance, suggesting a strengthening in global consumer demand compared to the last couple of years.
“The industry-wide emphasis on craftsmanship and provenance, backed by investment, means that Scotch exports are well-placed to grow in the future, appealing to consumers in both mature and emerging markets.
“It is clear, however, that the uncertainties of the Brexit vote will create challenges for exporters and we continue to encourage early clarity on the likely shape of the UK’s future trading relationship with the EU and other countries.
“We are working closely with our members and government to ensure the industry’s trade priorities are well understood, to promote open markets, and to identify opportunities to grow our exports in the future.
“Given the continued international uncertainty, we also look to government to make every effort to put in place a competitive domestic tax and regulatory environment, supporting a key home-grown industry.”
