Scotch exports show international resilience

In new figures published by The Scotch Whisky Association (SWA), the value of shipments increased by 8% to £3.06bn, earning £97 a second for the UK last year. For the fourth consecutive year, both bottled Malt (+9% to £497m) and bottled Blended Scotch Whisky (+9% to £2.43bn) exports increased in value.

The increase in value was achieved despite a 5% reduction in export volume, reflecting the industry’s investment in pr emiumisation in recent years. Overall, the equivalent of 1,080 million bottles of Scotch Whisky were shipped overseas, the industry’s second best ever volume performance.

The annual figures showed Scotch Whisky to be recession-resilient but not recession immune. The industry was impacted by difficult economic conditions, particularly in the last quarter. A challenging 2 009 is predicted due to weaker consumer confidence and some stock adjustments in a range of markets as a result of the economic downturn.

Paul Walsh, chairman of The Scotch Whisky Association, said: “Scotch Whisky exports have proved to be resilient in the face of difficult economic conditions in a range of markets. To achieve record export value at such a time is quite an achievement and underscores just how important the industry is to the UK economy. I am convinced that the major investments made by distillers will stand us in good stead for the re turn to better economic times. As that happens, whisky will play a leading role in exporting the economy out of recession.”

Gavin Hewitt, chief executive of the SWA, said: “Building on the industry’s impressive performance in 2008, the Association is optimistic about Scotch Whisky’s long term international prospects, despite difficult market conditions in the year ahead. Our prospects are also shaped by the actions taken by government. At a time of recession, we look to government to work with us and to show its support for the Scotch Whisky industry at home and overseas.”

Summary of Scotch Whisky shipments by value on a regional basis (2008)

Central & South America ( -2% to £331m)
Whilst there was promising growth in Brazil (+10% to £41m), exports to the region overall were down. This was due primarily to a decrease in shipments to Venezuela (-36% to £67m), where the economic situation was challenging and market access difficulties continued.

Asia (+5% to £598m)
Direct whisky exports to China grew (+5% to £44m) in 2008. The market is larger than that figure suggests. However, onward, indirect shipments from Singapore are not captured in the data. Whilst there was encouraging progress towards the introduction of non-discriminatory tax arrangements in a number of Indian States, exports to India were down (-4% to £32m).

North Ameri ca (-6% to £451m)
Value growth in Canada (+11% to £46m) and Mexico (+59% to £34m) was offset by a reduction in export value to the United States ( -11% to £371m), which remained the largest export market. T his reflected a weakening in consumer confidence due to the economic recession, particularly in the last quarter of the year.

Africa ( +10% to £142m)
The key market in Africa continues to be South Africa. Exports to the market grew again in 2008, up 12% to £101m, with South Africa one of the industry’s fastest growing markets for several years.

Europe (+17% to £1.28bn )
There was strong growth in the value of exports to the EU, with key markets performing well. Outwith the main markets, the popularity of Scotch Whisky in Poland continued to increase (+33% to £21m). The market has grown by over 330% in value since Poland’s accession to the EU in 2004.

Australasia (+30% to £68m)
Exports to the region are dominated by Australia, which experienced strong growth (+32% to £61m) making it the industry’s eleventh largest market by value.

May 09

1 May 2009 - Felicity Murray