Lucrative emerging markets offer boost to whisky exports

SCOTCH whisky exports powered through global economic uncertainties in the first half of this year, driving up exports 22 per cent to £1.8 billion and making strong headway in the United States despite its subdued recovery.

That compared with exports valued at £1.47bn in the first half of 2010. The US remained the top export market by value, with shipments up 14 per cent to £268 million from £233.7m.

Gavin Hewitt, chief executive of the Scotch Whisky Association (SWA), said: “Scotch whisky producers can be proud of their continuing success.

“Scotch whisky is a main driver for the UK and Scottish economies in building export markets. We are making a strong contribution to the Scottish government’s ambition of growing the country’s exports by 50 per cent by 2017.”

France was the Scotch whisky industry’s second most valuable market, where exports by value lifted 13 per cent to £219.5m from £194.1m.

The trend of emerging markets becoming increasingly important to the industry continued. Shipments to Central and South America leapt 49 per cent to £214.4m, while exports to Asia surged 33 per cent to £422.5m. Shipments to Brazil alone rose 56 per cent.

Hewitt said recent breakthroughs in international trade relations would help further progress, adding: “A free trade agreement with South Korea and better legal protection for Scotch whisky in India and Turkey give optimism for further growth.

“India and Turkey are now among the countries which recognise Scotch as a product that can only be made in Scotland.”

The SWA revealed that the volume of shipments grew alongside increased value. The equivalent of 560 million bottles was exported in the period, an increase of 19 per cent on the corresponding period last year.

The gain was less impressive on an annualised basis from July 2010 to June 2011, with volumes up less than 5 per cent. However, the trade body said: “This figure reflects the slowdown at the end of 2010 due to economic uncertainty, followed by a growth in confidence among producers bolstered by increased demand from emerging markets.”

Elsewhere, Scotch exports to Taiwan grew to £70m from £48m, returning that country to a position as one of the industry’s top five markets. Exports to South Africa, Germany and United Arab Emirates were up 24 per cent, 22 per cent, and 29 per cent respectively.

Hewitt said the SWA was seeing some marginal trading down from premium to standard Scotch in the US, the country still mired in a fragile recovery.

But he said the figures showed “we are as an industry able to hold our own in pessimistic times as well as good times”.

Emerging markets such as Mexico, Brazil and China, meanwhile, continued to benefit from “a growing mixture of affluence and aspiration. There’s a burgeoning middle class in these markets,” the SWA chief added.

Taiwan was similar, Hewitt said, its consumers moving from drinking mainly blended whisky in the 1990s to now being the third biggest single malt export market in the world.