There is now clear evidence that the recent decline in the Scotch whisky sector is slowing, with a return to growth “on the horizon”, the Scotch Whisky Association (SWA) has said.
Industry exports in the first half of the year totalled £1.7bn; encouraging trends are starting to develop in several key markets despite continuing economic headwinds, political uncertainty and the impact of a stronger pound in many areas. The decline in the value of Scotch whisky slowed to 3% in the first six months of 2015 – significantly lower than the 11% decline between the first half of 2013 and the same period in 2014.
Premium blends and single malt Scotch whisky continued to become more popular with single malt exports topping £400m. Overall, the volume of exports was down by half of last year’s decline, falling just under 3% to the equivalent of 517m bottles. Exports to the US remained steady and there was strong growth in Mexico and Japan, as well as a return to growth in China. But SWA warned that other markets were still volatile: France and Spain increased their volume of Scotch whisky imports but their value fell, while Germany was down in terms of both value and volume.
Outside Europe, the Brazilian market was badly hit, down nearly 30% in value because of the severe economic downturn and consequent weakening of the Brazilian Real by a third since the start of the year. Sanctions and economic developments in Russia have knocked it out of the top 20 markets for Scotch whisky altogether, while exports to India fell 11% by value and 8% by volume.
SWA chief executive David Frost said: “We’re starting to see some strong signals for growth and we continue to believe the long-term prospects for Scotch whisky remain good. This is reflected in the large number of new distilleries opening, with half a dozen starting production in the last year or so.
“The growth of single malt exports shows that premium products are ever more popular. We had a decade of record growth, there was then a decline in exports in recent years largely because of the slowdown in the emerging markets, but signs of improvement are on the horizon.
“We will continue to push for more open access to markets by pressing for the removal of barriers such as high tariffs and unfair levels of taxation. Scotch needs a level playing field, in the UK and overseas, to continue to be a Scottish and British success story.”
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