Scotch H1 exports steady at £2.57bn, but volume falls

The Scotch Whisky Association (SWA) has released new figures showing that the value of exports in the first half of 2023 held steady when compared with the record exports of the first half of 2022.

The value of Scotch whisky exports in the first half of 2023 was £2.57 billion, down by 3.6% or £95.8 million on the first half of 2022.

In the same period, however, the volume of exports fell by 20% or the equivalent of 160 million 70cl bottles to the equivalent of 630 million 70cl bottles.

“This continues the global trend of consumers premiumising in the spirits category, trading up within the Scotch Whisky industry to premium Blended Scotch Whisky, Single Malt and, increasingly, Blended Malt Scotch Whisky,” said the SWA.

“Consumers are drinking fewer units of alcohol, but premiumisation builds value in the UK economy through increased production, investment and export, and benefits the domestic economies of export markets through excise tax and other related costs.”

Scotch Whisky is the UK’s leading food and drink export. More than 11,000 people are directly employed in the industry in Scotland and over 42,000 jobs across the UK are supported.

For the whole year of 2022, Scotch Whisky exports were worth £6.2 billion and Scotch Whisky accounted for 77% of Scottish food and drink exports and 25% of all UK food and drink exports.

However, the value of H1 2023 exports of Scotch to the United States fell 5.1% to £437 million while the volume fell 14.9% to 59 million bottles.

The volume of H1 2023 exports of Scotch to France fell 12.6% to 88 million bottles — but the value of H1 exports rose 4% to £235 million.

The value of H1 2023 exports of Scotch to India fell 28.1% to £94 million, while volume fell 31.4% to 72 million bottles equivalent.

The value of H1 2023 exports of Scotch to Central and South America fell 47.8% to £178 million.

The SWA added: “The United States remains Scotch Whisky’s biggest export market by value, while France reclaimed its longstanding position as the largest export destination by volume.

“India remains a high-volume export market for Scotch Whisky, with the equivalent of 72m bottles exported in the first half of 2023.

“The Scotch Whisky Association continues to press the benefits to the industry of a UK-India FTA that addresses trade barriers including a 150% tariff, the phased removal of which would benefit industries in both the UK and India, and could see the value of Scotch exports to this vital market grow to more than £1bn within five years.

“Publishing the figures, the SWA called on the UK government not to take the success of the Scotch Whisky industry for granted following the recent 10.1% increase to excise duty and widening of the tax gap between spirits with beer and cider.”

SWA CEO Mark Kent said: “2022 was an exceptional year for Scotch Whisky exports, breaking records in both value and volume.

“So, at the half-way point of 2023, it is encouraging that the industry is keeping pace with export value, continuing to deliver significant economic growth through production and investment in Scotland and across the UK.

“Around the world, we continue to see the same trend – consumers drinking less overall and switching to higher quality spirits like Scotch Whisky.

“Premiumisation in the spirits category didn’t start during Covid-19, but the pandemic certainly accelerated the trend, and it remains the case that consumers are trading up, enjoying premium spirits, and consuming fewer units of alcohol. Scotch Whisky remains well placed to benefit from this shift.

“But the success of the Scotch Whisky cannot be taken for granted.

“The recent double-digit tax hike on Scotch Whisky in the UK, the largest in 40 years, and the deepening of the competitive disadvantage faced by distillers versus other alcohol categories was a blow to the industry.

“The future potential growth of the industry, in terms of exports, job creation and investment across Scotland and our UK supply chain, is dependent on working in partnership with government.

“Growth at home and abroad, coupled with a supportive domestic regulatory environment, is also key to driving forward our sustainability strategy and achieving Net-Zero.

“To deliver the platform for future growth, in the short term, this means three priorities.

“Firstly, no further tax increase in the autumn budget. Second, agreement of a comprehensive free-trade agreement with India which reduces the 150% tariff on Scotch Whisky.

“And third, gearing regulation to support the industry to achieve its full potential, recognising that in supporting Scotch the government is supporting a high quality, home grown product which delivers more economic benefit per serve than any other alcohol category.”

The largest export destinations for Scotch Whisky (defined by value) during H1 2023 were:

  1. US: £437m -5.1% (£460m in H1 2022)
  2. France: £235m +4.0% (£226m in H1 2022)
  3. Singapore: £165m +59.0% (£104m in H1 2022)
  4. Taiwan: £149m +21.4% (£123m in H1 2022)
  5. China: £135m +39.5% (£97m in H1 2022)
  6. India: £94m -28.1% (£131m in H1 2022)
  7. Germany: £91m +3.1% (£88m in H1 2022)
  8. Japan: £86m +6.1% (£81m in H1 2022)
  9. Spain: £81m +14.9% (£71m in H1 2022)
  10. South Korea £64m +9.6% (£59m in H1 2022)

The largest export destinations for Scotch Whisky (defined by volume, 70cl bottles equivalent) during H1 2023 were:

  1. France: 88m bottles -12.6% (101m bottles in H1 2022)
  2. India: 72m bottles -31.4% (106m bottles in H1 2022)
  3. US: 59m bottles -14.9% (70m bottles in H1 2022)
  4. Japan: 31m bottles -14.5% (36m bottles in H1 2022)
  5. Spain: 28m bottles -6.7% (31m bottles in H1 2022)
  6. Germany: 27m bottles -23.0% (35m bottles in H1 2022)
  7. Brazil: 21m bottles -57.0% (50m bottles in H1 2022)
  8. Turkey: 19m bottles +14.5% (16m bottles in H1 2022)
  9. Netherlands: 17m bottles +8.4% (16m bottles in H1 2022)
  10. Poland 16m bottles -9.9% (18m bottles in H1 2022)

In H1 2023, Scotch Whisky exports by global region (defined by value) were:

Asia Pacific:                               £857m                +13.5%

European Union:                      £728m                +3.8%

North America:                         £526m                -7.2%

Middle East and Africa:           £196m                -12.9%

Central and South America:    £178m                -47.8%

Europe (ex.EU):                         £95m                   +14.5%