The revenues of the UK’s Top 20 independent distilleries fell 9% last year — from £1.5 billion in 2019-20 to £1.35 billion in 2020-21 — according to accountancy group UHY Hacker Young.
The turnover of the whisky distilleries was hit hard by the 25% import tariff on whisky introduced by the United States in late 2019, which has since been scrapped.
UHY Hacker Young said the US is the largest importer of Scotch whisky, receiving 31.8% of all exported Scotch.
This tariff caused a significant fall in revenue for the larger independent distillers.
UHY Hacker Young said independent distilleries should see an upturn in revenues in the coming year.
In June 2021 the United States scrapped the Scotch whisky tariffs following a trade agreement with the UK.
Aided by the end of pandemic restrictions, revenues for whisky distillers are expected to recovery strongly.
Meanwhile, after a tough start to lockdown, last years’ revenue growth for the UK’s independent distillers of gin, rum and diversified spirits was markedly stronger than for whisky distillers.
Gin, rum and diversified spirits distillers saw 12% growth in their revenue, from £221.9 million in 2019-20 to £245 million in 2020-21.
“These distilleries can grow more quickly as there are no aging restrictions on their products, such as Scotch whisky’s three year minimum requirement,” said UHY Hacker Young.
“This allows them to get products to get to retailers faster. Their exports were also unaffected by US tariffs.”
James Simmonds, Partner at UHY Hacker Young, said: “It was a really tough year for the biggest independent distilleries – the US Scotch whisky tariffs hit them hard.
“This happening at the same time as pub and duty free store closures made things very difficult indeed for a time.
“The future looks brighter, with the tariffs lifted and the pandemic behind us. Independent distillers can hope for further growth ahead.
“What independent gin and rum distilleries need to do is to continue to maintain consumer excitement about their products.”
“Gin and rum distilleries did rather well through the pandemic.
“They avoided the effects of the trade wars and benefitted from consumers drinking spirits at home while pubs were closed.”