UPDATE 2 — Scotch whisky exports increased last year by 4% to more than £4 billion, with the value of single malt exports exceeding £1 billion for the first time, the Scotch Whisky Association (SWA) said.

This marks a return to growth for Scotch exports, following a few years of levelling off and small declines.

The SWA said that last year, Scotch remained the biggest net contributor to the UK’s balance of trade in goods.

In 2016, without the impact of Scotch, the UK trade in goods deficit would have been 2.8% larger at almost £139 billion, the SWA said.

Scotch accounts for more than 20% of the UK’s food and drink exports.

Scotch also makes up 73% of Scottish food and drink exports.

The SWA said the weakness of sterling gave a significant boost to Scotch exports in the second half of last year.

But the SWA added: “This short-term positive currency impact should be seen in the context of continuing uncertainties around Brexit in the longer term. ”

The SWA said last year’s key facts on Scotch exports included:

• Scotch exports up 4% in customs value on 2015 to £4,008,927,149 — worth £127 per second
• Volume up almost 5% to more than 1.2 billion bottles — almost 39 bottles exported every second
• Single Malt Scotch exports worth more than £1 billion for the first time — up almost 12% to £1.02 billion — the equivalent of 113 million bottles shipped overseas
• Scotch directly exported to 182 countries, up from 174

The SWA said all categories of Scotch grew last year, but bottled blended Scotch whisky was still by far the biggest.

Bottled blended Scotch whisky accounted for 69% of all Scotch volumes and values exported in 2016.

Single Malt’s market share continued to increase and now makes up just more than a quarter of the total value of Scotch exports.

The European Union remained the top destination for exports, worth around £1.2 billion of the total.

North America was the second largest destination, taking exports worth more than £1 billion, followed by Asia with shipments of £768 million.

Julie Hesketh-Laird, Scotch Whisky Association acting chief executive, said: “With Scotch whisky exports returning to growth and rising to more than £4 billion, and single malts exceeding £1 billion for the first time, we’re feeling optimistic about the future.

“Demand is rising in mature markets, such as the USA, and newer markets, including China.

“This confidence is reflected in the number of new distilleries — 14 have been opened in the last few years and we know of about another 40 in at various stages of planning.

“However, we have to be alert to the challenges, as well as the opportunities, of Brexit and political changes in the UK and across the globe.

“Industry success can’t be taken for granted and we need both the UK and Scottish Governments to work in partnership with us to deliver a business environment — at home and overseas — that supports sustainable growth.

“At home, for example, we are calling for a ‘sector deal’ for Scotch as the new UK industrial strategy develops, recognising our economic significance to communities across the country.

“And we have clearly set out our objectives for Brexit to support jobs and growth in the industry in an increasingly competitive global market.”

There was increased demand from a number of larger European markets, including Spain, the fourth biggest market, up almost 10% to £167 million; Germany, the number five market, up 13% to £164 million; and Poland, up 19% to £63 million.

The SWA said India was becoming increasingly significant with value of exports up almost 14% to £97 million to make it the ninth biggest market for Scotch.

“But its full potential will not be realised until its 150% import tariff is reduced,” said the SWA.

“The SWA is encouraging the UK Government to pursue a Free Trade Agreement (FTA), including measures to cut the tariff, with India as priority after Brexit.

“Exports to China increased 0.5% to £41 million with the market continuing on an upward trend following some decline due to austerity and political decisions.

“We are also calling on the Government to secure existing EU trade deal benefits, such as the South Korea FTA and the Colombia/Peru agreement that have created a more level playing field for Scotch in those markets.

“Some £87 million of Scotch was exported to Korea last year and Colombia grew 14% to £27 million.”

In its outlook, the SWA said: “This is an uncertain time for all business with a UK General Election on 8 June and Brexit negotiations getting underway.

“While we expect demand for Scotch whisky to grow in markets around the globe, we need support from governments at home and abroad.

“The industry’s continued success cannot be taken for granted by government and policy makers.

“The Scotch whisky industry was, for example, disappointed by the near 4% increase on spirits duty excise announced in the spring UK Budget and is calling for fairer treatment in future fiscal statements.

“The SWA would like to see an overhaul of the domestic excise system when the UK leaves the EU.”

The SWA said the Scotch industry had set out five key objectives for Brexit:

• As open a trade policy as possible, securing existing EU trade deal benefits and developing an ambitious agenda of new and refreshed FTAs
• Robust legal protection of Scotch whisky in the UK, EU and global markets
• Business certainty and consistency by transposing EU single market legislation of relevance to Scotch whisky into UK law
• Scoping out opportunities where a distinct UK approach could benefit domestic industry
• A domestic tax and regulatory agenda that delivers a platform for international growth