The Scotch whisky sector needs greater government support to recover from the impact of Covid-19 and transatlantic tariffs, according to Pernod Ricard’s Jean-Christophe Coutures.
Speaking following the publication of Pernod Ricard’s half-year results, Coutures, chairman and CEO of the firm’s Scotch whisky arm Chivas Brothers, said the group would be “calling strongly for government support” in the next budget. The UK budget is due to be held on 3 March.
Chivas Brothers’ organic sales for the second half of 2020 fell 10%, with declines in markets such as France, Spain and South Africa.
The Scotch whisky industry has been rocked by the impact of the coronavirus pandemic and US-imposed tariffs. According to trade body the Scotch Whisky Association (SWA), exports of Scotch whisky fell by £1.1 billion (US$1.5bn) in 2020 to its lowest level in a decade.
Coutures said: “We are really calling strongly for government support in particular for an excise tax [cut] in the next budget to support the Scotch industry.
“It has really been suffering significant export losses in 2020, the SWA is going to release the numbers and you will see that our industry has been absolutely hammered by the Covid context and the import duty increase in the US.
“This is an industry that has been suffering twice – once from its export business and second from the closure of its visitor centres. It’s a very large and sizeable industry in the UK, which really needs support in terms of excise reduction.”
The SWA has also issued calls for greater support for distillers, which SWA chief executive Karen Betts said would “mitigate the damage being done to Scotch whisky and help to reassure distillers that the UK government wants to support Scotch whisky”.
‘Reignite single malt’
Despite the challenges faced by the sector, Coutures also highlighted the possibility of reviving the Scotch industry by improving trading relations. He cited the chance to developed better relations with the US, and the UK governments ability to develop new free trade agreements (FTA) with countries such as Australia and India.
He said: “The second element, which is key, is prioritising the tariff expansion in the US to reignite single malt export to this market. So yes, Glenlivet is going well but when you look at the total industry, and small players in particular, they are suffering in all their export businesses to the US.
“I’m looking very positively on the agenda which has been outlined by the government on its FTA agenda with the view to crack a deal with New Zealand and Australia. And, very importantly for us as an industry, to manage and secure a FTA agreement with India, which is one of the largest Scotch whisky markets in the world with huge potential.”
Via News – The Spirits Business