Scotch whisky's export performance in the first half of 2023 has encountered a decline both in volume and value, marking a departure from the robust sales surge witnessed during the same period in the previous year. A stark reduction of 20% in volume, translating to a staggering 630 million 700ml bottles, has been recorded in comparison to the preceding six months of 2022. The value aspect presents a relatively more favorable landscape, although still grappling with a decrease of 3.6%, settling at £2.57 billion (US$3.28bn) for the initial half of 2023. These figures, unveiled by the Scotch Whisky Association (SWA), echo a global trend of "premiumisation," denoting a shift towards elevated preferences for premium blended Scotch, single malts, and blended malts.
The zenith of the Scotch sector's export prowess was achieved in 2022, with an unprecedented value of over £6 billion (US$7.3bn). This watershed year witnessed a remarkable 37% increase in the value of Scotch whisky exports, amassing £6.2 billion (US$7.5bn), complemented by a noteworthy surge of 27% in the number of 700ml bottles exported, reaching a count of 1.67 billion. In light of these robust achievements, Mark Kent, Chief Executive of the SWA, has expressed gratification at the industry's ongoing stride in export value, an accomplishment that continues to bolster economic growth via production and investment both within Scotland and across the wider UK landscape.
A recurring theme surfaces across the globe, reflecting a trend of moderation in overall alcohol consumption coupled with a propensity for premium spirits such as Scotch whisky. This shift towards premiumisation predates the Covid-19 pandemic, yet it has been further accelerated by the global crisis. The reorientation towards premium spirits, characterized by reduced alcohol units consumed, positions Scotch whisky favorably to capitalize on this evolving consumer behavior.
Unfurling the landscape of export markets, the United States maintains its mantle as the foremost destination for Scotch whisky by value, while France reclaims its stature as the top market by volume. Notably, India remains a robust "high-volume" export market, with a notable shipment tally of 72 million bottles during the opening half of 2023.
The SWA has consistently championed the merits of a free trade agreement between the UK and India, aiming to dismantle the substantial 150% tariff on international spirits. Such an agreement holds the potential to unlock greater opportunities for Scotch in the Indian market, with projections suggesting that within a five-year timeframe, Scotch exports to India could potentially exceed £1 billion (US$1.3bn).
Mark Kent underscores the industry's evolving landscape and emphasizes the imperative nature of collaboration with the government to propel growth on both local and global fronts. He identifies three primary priorities: preventing further tax hikes, forging a comprehensive free trade agreement with India, and cultivating a regulatory environment that supports the Scotch whisky industry's holistic growth strategy. In this equation, the government's support for Scotch whisky translates to backing a domestically nurtured product that delivers unmatched economic benefits per serving within the broader alcohol category landscape.
