DCSIMG

Scotch trade is seeing the benefit of a diplomat’s steady hand

  • by CLAIRE SMITH
 

BEHIND the twinkling smile and the ready laughter there is the precise and considered logic of a man who has enjoyed a distinguished career as diplomat.

Before taking over as chief executive of the Scotch Whisky Association, which has its nerve centre in a grand Georgian house in Atholl Crescent, Gavin Hewitt had a high-flying foreign office career – which included a spell as Our Man in Brussels.

And as he steers the august trade association towards its one hundredth aniversary Hewitt is determined to protect an industry which – in terms of its economic clout – is the equivalent of representing a small country.

“It is using exactly the same skills – the skills the diplomatic service taught me are very translatable,” says Hewitt, who has been at the helm for nine years.

He is one of only six people to have held the equivalent post for the last 100 years – which shows you something of the solidity of the organisation.

When it was originally founded the organisation encompassed both wine and spirits. It became the whisky association in 1917 – when it included both Scottish and Irish whisky. ­Finally, in 1942, it took its present form.

“Fundamentally it is a trade association. Its objective is to protect and promote Scottish whisky. We lobby and argue on behalf of our members in Edinburgh, London and in Brussels.”

Hewitt’s role takes him to the rapidly growing markets of India and China once or twice a year and to Mexico and Brazil – where he works to ensure that Scotch remains Scotch.

And the stakes are huge. Last year whisky to the value of £4.23 billion was exported overseas – making it the UK’s largest fast-moving consumer goods export.

In terms of the Scottish economy, Scottish whisky represents Scotland’s number one export after oil and gas.

Scotch whisky represents 80 per cent of Scottish food and drink exports by value as well as 25 per cent of UK food and drink exports and 40 per cent of EU spirit exports.

The industry directly employs 10,000 people in Scotland, with an additional 25,000 ­indirectly employed in the ­supply chain, in areas such as packaging and distribution. Put those two figures together and the Scotch Whisky industry ­accounts for one in fifty jobs in Scotland

To commemorate its centenary the SWA will be mounting an exhibition in the entrance hall of the Scottish Parliament, which will include a selection of miniature stills, a life sized ­fibreglass white horse and a small model of a giraffe.

As well as the symbolism and cultural ­significance of whisky the ­exhibition will also stress its ­economic importance.

In terms of excise duty, Scotch accounts for £800 million to the treasury every year. In total, 75 per cent of every bottle sold in the UK goes to the treasury both in tax and VAT. Forty ­bottles of Scotch are sold every second earning £134 a second for the UK balance of trade. According to the SWA the current SNP ­proposals for minimum per unit alcohol pricing will ­severely damage both ­exports and ­domestic sales.

“We know our business very well and we predict that within five years we could lose 20 per cent of our exports. People would use the Scottish ­precedent to start shifting markers for ­imported products.”

The challenge in the court of session, which will argue that the Scottish government is exceeding its current powers, is only one part of the SWA strategy to fight minimum pricing – which will raise the price of 85 per cent of blended Scotch sold in the UK.

Mounting an exhibition in parliament will also underline a key message – in the run up to independence the whisky industry is too big to be ignored. In terms of the future, the SWA desperately needs some answers. “We are apolitical and it is the electorate that will make the decision but we have no idea of what the duty regime will be if the electorate decide to vote for an independent Scotland.”

In its response to the referendum consultation the SWA wrote: “In planning for future success, industry needs political and economic stability, the ­prospect of sustainability and certainty about the future ­business environment.

“There is an urgent need for both the Scottish and UK governments to set out unequivocally what independence, if that was the choice of the electorate, would mean for Scotland and companies doing business there.

“These include the timing of the referendum on independence, the structures of government and financial-economic administration, Scotland’s overseas representation, membership of the European Union and the World Trade Organisation, all of which are critical to the Scotch Whisky industry in its overseas markets.

“The sustainability of the industry matters to Scotland’s prosperity and to the success of the companies and the jobs they generate in Scotland.

“In its day to day operations the SWA has to know where it stands in order to negotiate with foreign governments and ensure Scotch whisky retains its unique place in the world.

“Scotch can only be made in Scotland – end of story.”

Hewitt shows me a can of Grant Regal “Scotch” – exported in huge quantities from Austria to Iraq. A sample of the rogue “whisky” was sent to the SWA by a German Scotch drinker. It was a mixture of neutral alcohol, ­colour and flavouring.

He added: “That is the sort of trade we try to stop. The consumer buying this was being traduced and the reputation of Scotch was put on the line.” He says he hopes the exhibition, which opens on 29 November, will underline to both the decision makers and consumers the importance of protecting and promoting whisky.

He tells me about a meeting of economists asked to discuss the impact of the scotch trade: “It wasn’t stage managed but every single one of them said, ‘We use Scotch whisky to open doors when we are doing business abroad. If we use Scotch whisky we have got our foot in the door’.”

More than anything else a bottle of S0cotch is our calling card around the world. And our man in Atholl Crescent is ­determined to keep it that way.

 

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