Scotland business

Scotch whisky exports remain flat

Whisky bottling line Image copyright Scotch Whisky Association
Image caption The Scotch Whisky Association said exports remained strong but there were still short-term "economic headwinds"

Scotch whisky exports stagnated last year, as sales were hit by slowing demand in China and other emerging markets.

Figures from the Scotch Whisky Association (SWA) showed overseas sales remained flat at £4.3bn by value.

In volume terms, exports increased by 2.5% to the equivalent of 1.23 billion bottles.

Scotch whisky performed strongly in the US, Mexico and India but direct exports to China fell by nearly 30% to £51m.

Sales to Taiwan, South Korea and Japan also fell in value, by between 13% and 15%.

The best performers included the US, which saw exports of Scotch grow 8% on 2012 to a record £819m.

The US was by far the largest market for whisky by value.

France remained the largest volume market for Scotch.

SWA said sales there rose by 16% as the market recovered following a tax hike on spirits at the start of 2012.

India, which is now Scotch whisky's fourth biggest market by volume, saw the value of whisky sales climb by 12% to £69m.

SWA said it hoped EU-India Free Trade Agreement negotiations would restart following this year's Indian elections, leading to a reduction of the current 150% import tariff.

Exports to Brazil and Mexico grew by about 20% - to £99m in Brazil and £110m in Mexico.

In January, spirits producer Diageo reported slowing sales in China and other emerging markets.

The company said new rules over gift-giving and spending by Chinese officials dented sales in the country by 66%.

SWA chief executive David Frost said: "Scotch whisky exports remain strong and the industry's impressive performance makes a major contribution to the UK's trade performance.

"The unprecedented investment programmes in Scotch whisky by producers show that in the long term they are confident that demand will continue to grow.

"However, in the short run, there are some economic headwinds. Formal and informal barriers to trade remain."

He added: "We should remember that the industry's success does not come automatically but is based on hard work, investment and careful stewardship."

Mr Frost also made a plea for strong government backing for the industry.

He said: "As a former ambassador, I know that the industry also depends on strong political support from government, for example to influence European Union negotiations on our behalf or to press other countries to allow better access to their markets.

"Both the UK and Scottish governments have played an important role in this so far."

He added: "Whatever the outcome of the Scottish referendum, as an industry exporting to around 200 markets we will continue to need the backing of an effective diplomatic network with the necessary global reach, commercial expertise, and capacity to influence."

Overall, Scotch whisky accounts for about 85% of Scottish food and drink exports and nearly a quarter of the British total.

Top Scotch whisky export markets by value
Position 2013 2012 % change
1. USA £818.7m £758m +8
2. France £434m £434m 0
3. Singapore £329.7m £339.2m -3
4. Spain £180m £195.3m -8
5. Germany £172m £168.8m +1.8
6. S Africa £163.5m £161.6m +1
7. Taiwan £144.6m £165.4m -12.5m
8. S Korea £115.4m £135.7m -15m
9. Mexico £109.8m £91.8m 19.5
10. Brazil £99.1m £83.6m 18.5

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