Exports of Scotch whisky fell by £1.1 billion (US$1.5bn) in 2020 to its lowest level in a decade as a result of the pandemic and US-imposed tariffs, according to the Scotch Whisky Association.
In 2020, exports of Scotch Whisky fell 23% by value to £3.8bn (US$5.3bn). The number of 700ml bottles exported dropped by 13% to the equivalent of 1.14bn.
According to the Scotch Whisky Association (SWA), the export figures are the lowest they have been in a decade due to the impact of Covid-19 and the 25% tariff placed on Scotch whisky by the US.
The United States is Scotch Whisky’s most valuable market and was worth more than £1bn (US$1.4bn) in 2019. However, in 2020 exports of Scotch Whisky to the country fell by 32% to £729 million (US$1bn), which accounted for around one third of total global export losses.
Since the 25% tariff was imposed in October 2019, Scotch Whisky exports to the US have fallen 35% or £542m (US$749m).
Karen Betts, chief executive of the Scotch Whisky Association, said: “These figures are a grim reminder of the challenges faced by distillers over the past year, as exports stalled in the face of the coronavirus pandemic and US tariffs. In effect, the industry lost 10 years of growth in 2020 and it’s going to take some time to build back to a position of strength.
“In these challenging times, what’s so disappointing is the damage being caused by US tariffs. The US has been, for decades, our strongest and most valuable market, but Scotch Whisky is now losing considerable ground there.
“These tariffs were avoidable had the UK, EU and US governments and the European and American aerospace industries been less intransigent. That governments and companies have allowed their dispute to continue while the livelihoods of real people, and the future of one of Scotland’s oldest industries, are put at stake reflects badly on them.”
Exports to the 27 member states in the European Union, the industry’s largest regional export market, also fell by 15% as a result of the closure of hospitality and travel restrictions impacting airport retail.
As a result of the detrimental impact tariffs and the Covid-19 pandemic are having on the Scotch whisky sector, the SWA has repeated its calls for greater support for distillers.
Betts added: “The Scotch Whisky industry has now paid over half a billion pounds in tariffs – which are a form of tax – on behalf of the UK government because of the subsidies that the government granted to the aerospace sector in breach of World Trade Organisation rules.
“So, we are calling on the chancellor to support Scotch whisky distillers by reducing our tax bill in the UK. Rishi Sunak can do that by cutting spirits duty in next month’s budget. That will help to mitigate the damage being done to Scotch whisky and help to reassure distillers that the UK government wants to support Scotch whisky in riding out the current storm and returning to growth when possible.”
Via The Spirits Business