The Scotch Whisky Association (SWA) on Thursday welcomed the UK Government’s announcement that tariffs on Scotch Whisky have been suspended for a further five years as part of a UK-US deal on future aerospace subsidies.
The Artisanal Spirits Company (ASC), the owner of The Scotch Malt Whisky Society (SMWS) which joined the stock market earlier this month, also welcomed the suspension by the US Government of the 25% tariff on imports of Scotch whisky for a period of five years.
Artisanal’s shares were up 10% on Thursday.
In 2019, Scotch Whisky accounted for 75% of Scottish food and drink exports and 21% of all UK food and drink exports.
Scotch Whisky exports were worth £3.8 billion in 2020, down from £4.9 billion in 2019.
More than 10,000 people are directly employed in the Scotch Whisky industry in Scotland and over 40,000 jobs across the UK are supported by the industry.
Commenting on the UK-US deal on future aerospace subsidies which further suspends tariffs on Scotch Whisky for five years, SWA chief executive Karen Betts said: “This is very good news for Scotch Whisky.
“The past two years have been extremely damaging for our industry, with the loss of over £600m in exports to the United States caused by a 25% tariff on Single Malt Scotch Whisky imposed as a result of the long-running dispute between US and European aircraft manufacturers.
“This deal removes the threat of tariffs being reimposed on Scotch Whisky next month and enables distillers to focus on recovering exports to our largest and most valuable export market.
“Today’s agreement is a culmination of many months of intensive negotiations and we’re grateful to Liz Truss, International Trade Secretary, and Katherine Tai, US Trade Representative, and their teams for their hard work.
“Given, however, that this deal suspends tariffs rather than fully resolving the underlying dispute, what’s critical now is that the governments and aerospace companies on both sides stick to their commitments and work with one another constructively.
“I want to note too that American whiskies remain subject to tariffs on entry into the UK and EU as a result of a separate dispute on steel and aluminium, and we hope these tariffs can also be resolved quickly.”
The Artisanal Spirits Company said: “As disclosed in the company’s Admission Document, published on 4 June 2021 and available on the company’s website, the negative impact of the tariffs on the profits of the ASC Group in 2020 was £658,000.
“The group budget for 2021 included a similar level of provision.”
Artisanal Spirits Company executive managing director David Ridley said: “Today’s trade deal is an important, positive development for the Scotch whisky industry.
“The suspension of the tariffs removes regulatory uncertainty in one of our key markets for the foreseeable future, providing ASC with greater visibility around US exports and enabling us to plan with increased confidence and continuity to further build on our rapid growth momentum in the USA.
“The agreement is fantastic news for the industry and the growing number of Scotch whisky lovers in the US, who can now look forward to wider availability of the iconic spirit.“