Whisky body hails export rise but wary of no-deal Brexit
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WITH exports continuing to rise the Scotch Whisky Association (SWA) has called on the UK government to ensure certainty in future trading conditions.
The value of exports increased by 10.8% to £2.19billion in the first half of 2019.
This growth in exports underscores Scotch Whisky’s enduring popularity with consumers around the world.
However, the SWA believes the increase is partly due to the actions taken by a number of distillers to lessen the risk of a no-deal Brexit.
SWA chief executive Karen Betts said: "These figures are great news for distillers, their employees and the communities in which we work.
"However, they also bring to life the uncertainties in today’s challenging trade environment.
"The value of exports grew more than anticipated in the first six months of 2019. We believe this was driven by action taken by producers to mitigate the risks of a no-deal Brexit and the threat of tariffs in key global markets.
"For example, there was significant growth in exports to South Korea and Morocco, both markets where tariffs could have been re-imposed if the UK had exited the EU without a deal on March 29."
Ms Betts stated that shipments to South Korea increased by 25%, and exports to Morocco increased by 74% in the first half of the year.
She said: "We are urging the government and MPs to work constructively together to enable the UK and the EU to agree on the terms of the UK’s departure. This will give us clarity in the UK’s future trade relationships with the EU and other global markets.
"Prolonged uncertainty is costing the industry money in no-deal planning and in exporting as companies have, where they can, brought exports forward, incurring additional capital on additional warehouses and other associated costs."
Ms Betts added that the UK government must take these pressures into account when deciding on duty rates in the autumn budget.
She continued: "Cuts and freezes to spirits duty over the last five years have increased the revenue available to government to spend on public services, while at the same time giving our industry the confidence to invest in production and tourism, benefitting communities across Scotland and our UK supply chain.
"Uncertainty in our trading environment means, now more than ever, that the Scotch Whisky industry needs continued tax stability here at home."
Some whisky export facts:
The UK has recently signed continuity agreements with the following countries, meaning existing benefits from the European Union fair trade agreement would continue:
Andean countries (Colombia, Ecuador, Peru)
CARIFORUM (Dominican Republic)
Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama)
Eastern and Southern Africa (Mauritius)
The UK has not agreed continuity agreements with the following markets where tariffs would return in the event of a no-deal:
Bosnia & Herzegovina
Exports show that value increased 10.8% to £2.19bn compared with the same period last year.
Volume also increased, but less significantly by 7.1% on 2018.
The European Union saw significant growth in value and volume in the first three months, (+27.9% value) and +14.5% (volume) They then dropped in the following three months by -13.2% and -20.5%.
This reflects shipments ahead of the March 29 deadline for Article 50.
Exports to the USA by value increased sharply (+19.5%). The USA remains the top export market.