Scotch Whisky exports totalled £1.7 billion in the first half of 2015 as the decline of recent years slowed significantly. Scotch exports to Brazil, India and Russia were down but most other markets showed strong demand.
The Scotch Whisky Association (SWA) said the 3% decline in the value of exports in first six months of 2015 was much smaller than the fall of 11% between the first half of 2013 and 2014.
Indeed, premium blends and Single Malt Scotch Whisky continue to become more popular. Single Malt exports were up 5% to £406 million in the first half of 2015.
The SWA said volume of exports was down by half of last year’s decline, falling less than 3% to the equivalent of 517 million bottles.
The SWA said “encouraging trends” are developing in several key markets despite economic challenges, political uncertainty and the impact of a relatively stronger pound which can make exports more expensive.
“We’re starting to see some strong signals for growth and we continue to believe the long-term prospects for Scotch Whisky remain good,” said David Frost, SWA chief executive.
“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.”
Exports to the United States, the biggest market by value for Scotch Whisky, remained steady at £327 million. The SWA said Single Malts and premium blends are doing particularly well in the US as consumers look for quality. In Canada, the same trends drove an increase of 20% to £36 million.
Exports to Mexico, the other North American Free Trade Agreement (NAFTA) market, were up almost 12% to £43 million, making it a top ten market for Scotch. The value of Single Malt exports to Mexico jumped by more than 70% to £3.6 million.
The SWA said that if a refreshed European Union-Mexico Free Trade Agreement (FTA) can be agreed, prospects for Scotch exports will be even healthier.
France was the biggest market by volume for Scotch exports, with 86.5 million bottles in the first six months of 2015.
Despite the slowdown in China, that market returned to growth with direct Scotch exports jumping 46% to £22 million in the first half of the year. Exports of bottled Blended Scotch to China were up 42%.
Exports to Japan were up 7.2% to £35 million. “After many years of decline, it is exciting to see the market grow again on the back of renewed interest in whisky,” said the SWA in a statement. “The increased interest in heritage among whisky consumers is benefiting Scotch.”
In Europe, Scotch exports to France and Spain were up in volume but down in value. Germany was down in both value and volume, but some of this is thought to reflect a fall in re-exports to Russia.
Exports to Poland were up 45% in value to £20 million. Turkey was up 28% to £23 million, and Italy was up slightly after years of decline.
The Brazilian market was down nearly 30% in value because of that country’s economic downturn and the weakening of Brazil’s Real currency 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 altogether.
Exports to India fell 11% by value and 8% by volume, “reflecting ongoing difficulties in the business climate,” but India remains the fourth biggest market for Scotch by volume.
“A resumption and conclusion of the Free Trade Agreement negotiations is needed if sustained export growth is to take place in India,” said the SWA.
Full details here: export_tables_half_year_2015_value___volume_draftnew