The Scotch Whisky Association (SWA) has released export figures for the first half of 2021 that show signs of recovery following the impact of Covid-19 and US tariffs.
Data for the first half of 2021 shows that the value of Scotch whisky exports were up 31% compared to the same period last year, with volume up 42%. However, exports remain down 10% by value vs 2019, and the industry still has some way to go to recover lost growth and return to the record export figures of 2019.
Exports of Scotch Whisky to the EU fell in the first three months of 2021 compared to 2019, as lockdowns on the continent continued and producers adjusted to new post-Brexit trading arrangements. However, EU exports grew at a faster rate between April and June 2021 than in the same period of 2019. Exports to markets in Asia, which were quick to recover during the second half of 2020, continued to grow in the first half of 2021. For example, in the first half of this year, China has already surpassed the £89m exported in the whole of 2019 – growing 126% to £91m.
The United States remains Scotch Whisky’s biggest export market by value, worth more than £1bn in 2019. But the 25% tariff on Single Malt Scotch Whisky, which was implemented in October 2019, saw total exports fall to £729m in 2020, a drop of one third. The tariff was suspended in March 2021, but the industry has warned that it will take time, investment and support for exports to the US to regain their strength following a devastating 16 months. Exports of Scotch Whisky to the US for the first half of 2021 remain down by 34% when compared to the same period in 2019.
Publishing the figures, the SWA has called on the UK government to fulfil its promises to back the industry in the autumn budget, which contributes more than £5.5bn to the UK economy and supports 42,000 jobs.
Karen Betts, Chief Executive of the SWA, said: “The pace of recovery of Scotch Whisky exports is very promising. Last year, the combination of US tariffs and Covid-19 brought Scotch Whisky exports to their lowest level in a decade, so it’s encouraging to see them start to regain strength.
“But like many other sectors, Scotch Whisky companies are feeling the ongoing impacts of trade disruption on our supply chain and global distribution, and the cost of goods and services has risen significantly. In addition, international tourism is yet to recover and global hospitality is some way from emerging from the impact of the pandemic.
“Our industry will need support to recover fully from the turbulence and lost exports of the last couple of years. As part of this, the UK government must commit to completing the long-awaited review of alcohol duty, and to living up to its manifesto commitment to ensure that Scotch Whisky is treated fairly against other categories of alcohol.
“As we continue to wait for this promise to be delivered, there are other opportunities the government can pursue to boost the industry’s recovery in global markets. Reducing the 150% tariff on Scotch Whisky in India must be the UK government’s top priority when trade negotiations begin later this year.”