Scotch Whisky Association's warning as export values plummet in 2020

The Scotch Whisky Association (SWA) has warned of a 'lost decade' of growth in the industry after reporting that global exports of Scotch whisky fell by more than £1 billion during 2020.

The export figures - impacted by the Covid-19 pandemic and a 25 per cent tariff imposed on single malt Scotch whisky exports to the United States - are the lowest reported in a decade.

In 2020, the export value of Scotch whisky exports fell by 23 per cent to £3.8bn, while the volume of exported whisky fell by 13 per cent to the equivalent of 1.14 billion 70cl bottles, the SWA said.

Measures to combat Covid-19 saw the value and volume of exports fall in most of Scotch whisky's top 10 markets in 2020. Hospitality venue closures and travel restrictions impacting airport retail caused a 70 per cent drop in value in the sector's global markets compared with 2019. Exports to the 27 countries in the EU - Scotch whisky's largest regional export market - fell by 15 per cent.

But the punative export tariffs in the United States caused the most significant losses, the SWA said, with the market losing almost a third (32 per cent) of its value between 2019 and 2020, dropping from more than £1 billion to £729 million. 

As a result of the figures, the industry has repeated calls for more support for Scotch whisky distillers in the UK Budget on 3 March - particularly in regard to the impact of US tariffs.

Karen Betts, CEO of the Scotch Whisky Association, said: "These figures are a grim reminder of the challenges faced by distillers over the past year, as exports stalled in the face of the coronavirus pandemic and US tariffs. In effect, the industry lost 10 years of growth in 2020 and it's going to take some time to build back to a position of strength.

"What's so disappointing is the damage being caused by US tariffs. The US has been, for decades, our strongest and most valuable market, but Scotch whisky is now losing considerable ground there. The tariffs were avoidable had the UK, EU and US governments and the European and American aerospace industries been less intransigent.

"The Scotch whisky industry has now paid more than half a billion pounds in tariffs on behalf of the UK government, because of the subsidies that the government granted to the aerospace sector in breach of World Trade Organisation rules. So we are calling on the Chancellor to support Scotch whisky distillers by reducing our tax bill in the UK. Rishi Sunak can do that by cutting spirits duty in next month's Budget."

16 February 2021 - Bethany Whymark