Scotch whisky flags ‘concerning’ trends in weak export data for key product
EDINBURGH (Reuters) – Makers of Scotch whisky are worried about trends showing falling sales volumes of Britain’s biggest food and drink export, although sales were still higher in terms of value in pounds, they said on Monday.
Sales of Scotch overseas fell 2% to 528 million bottles in the first half of 2017, although the value rose 3.4% to £1.8 billion ($2.37b.), helped by a shift in tastes to more-expensive single malts as well as a weak pound, the Scotch Whisky Association industry lobby said.
Sales of whisky, Scotland’s most emblematic product, are being helped abroad by a decline in the value of the pound since Britain voted to leave the European Union last year.
Scotch whisky accounts for nearly a fifth of Britain’s total food and drink exports, by far the leading product in the sector.
Karen Betts, the head of the SWA, said the figures were positive but showed “concerning underlying trends,” adding that the government could support the industry in its home market at a key moment by cutting taxes on UK whisky.
Sales to France, for example, the world’s biggest market for Scotch in terms of liters sold, were down 6.8% to 85.9 million bottles, with a decline in value of 0.2%.
In the same period, sales in the UK fell 2.6% in the first six months of the year to 36.7 million bottles, figures released earlier this year showed, following a hike in taxes.
“With the changes Brexit will bring to the way the industry operates and trades, we need the support of the UK government at home and overseas if we are to grasp the opportunities and keep this international success story going,” Betts said in a statement.
Brexit has mired Britain in political and economic uncertainty as the government has yet to negotiate a new trade deal with the EU. A cut in UK taxes on the spirit could give the industry a boost, Betts said.
“The [finance minister] could take a step in the right direction in next month’s budget by cutting the tax on an average-priced bottle of Scotch from the staggering level of 80%,” she said.
Chancellor of the Exchequer Philip Hammond will announce the British budget on November 22.