By Rory Murphy
Exports of Scottish whisky fell by more than £1.1 billion in 2020 to the lowest level in a decade, according to an industry body.
The Scotch Whisky Association (SWA) blamed the twin impact of coronavirus and the 25% US export tariff for the drop.
Exports dropped 23% by value to £3.8 billion in 2020, the association said, with the value and volume of exports to most of the drink’s top 10 markets falling.
Hospitality closures and travel restrictions affecting airport retail led to export values falling in 70% of the global markets for Scotland’s national drink, compared to 2019.
Exports to the EU, the industry’s largest regional export market, fell by 15%.
The SWA is calling on Chancellor Rishi Sunak to cut spirits duty in the upcoming UK Budget to help repair the damage done to the industry.
Chief executive Karen Betts 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 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.
“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.”
The Chivas plant at Kilmalid in Dumbarton exports large volumes of whisky and is responsible for more than 500 local jobs. The UK Government has been contacted for comment.
Meanwhile, two Scottish ministers have called for more help for the whisky industry from the UK Government.
Rural Economy Secretary Fergus Ewing has pushed for Brexit-related export issues to be resolved as a matter of urgency in a letter to Rural Affairs Secretary George Eustice.
The whisky industry has faced disruption due to Covid-19, Brexit and tariffs imposed by the US following a dispute with the EU.
Ewing said: “It’s been a particularly difficult year for Scotland’s food and drink sector.
“The whisky industry was already reeling from the triple threat of US import tariffs, the coronavirus pandemic slowing global demand, and a complicated alcohol duty system before Brexit compounded matters.
“Like many food and drink businesses, the sector is struggling with complicated bureaucracy post-Brexit and it is vital that such issues are resolved as soon as possible.
Finance Secretary Katie Forbes, Fergus Ewing and some very fine Scotch whisky.
“I have written to the UK Government urging them to address the problems and will do my utmost to help one of Scotland’s greatest food and drink success stories get through this challenging time.”
A UK Government spokeswoman said: “Scotch whisky is world-renowned, and we are working closely with the industry to help them take advantage of new export markets.
“The UK Government promotes the Scotch whisky through the Food is Great campaign.
“Last year, we announced £1m dedicated to showcasing Scottish food and drink exports around the world.
“We are confident the sector is well-positioned to benefit from the expansive trade deals that we are now striking.”