Scotch whisky generates £5bn a year for UK economy

Scotch whisky creates almost £5 billion a year for the UK economy, according to research.

Whisky contributes 5 billion pounds to the UK economy. Picture: Contributed
Whisky contributes 5 billion pounds to the UK economy. Picture: Contributed

The study, commissioned by the Scotch Whisky Association (SWA), also found that the industry supports more than 40,000 jobs across Britain, including 7,000 in rural areas.

It was also the biggest net contributor to the UK’s trade in goods in 2015, the report said.

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The document, entitled The Economic Impact of Scotch Whisky Production in the UK, was published as people prepare to raise a dram to celebrate Burns Night.

The study said: “The Scotch whisky sector directly contributes over £3.2 billion to the Scottish economy. When indirect and induced effects are taken into consideration, the industry’s impact is £4.7 billion.

“The industry is rooted in Scotland but benefits from a closely related supply chain in the rest of the UK.

“When the rest of the UK is taken into account, a further £268 million is injected into the economy, leading to a UK-wide impact of more than £4.9 billion.”

It adds that overall employment associated with Scotch whisky in the UK is just below 40,200, marginally up on previous figures.

This includes more than 10,500 people directly employed in Scotland. Almost £1.3 billion is paid in salaries north of the border.

The report found that the Scotch whisky sector is the largest net exporter of any British industry.

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Exports of the spirit are worth £3.9 billion each year, while imports in the supply chain, such as packaging for products and casks, total £200 million, giving a trade balance of £3.7 billion.

“In 2015, the UK exported more than £266 billion worth of goods (excluding oil) and imported over £378 billion, resulting in a trade deficit of almost £112 billion,” the research said.

“Without the positive impact which Scotch provides, the balance of trade deficit in goods would have been £115.5 billion.”

Despite the figures, the SWA said the uncertainty created by Brexit means the industry needs more reassurance that it will receive “fair treatment” from government.

The SWA is calling for the UK Government to “stand up for Scotch” in the forthcoming Budget and deliver a 2% cut in spirits excise duty.

Julie Hesketh-Laird, SWA acting chief executive, said: “Scotch whisky is one of the UK’s most strategically important industries. Without valuable Scotch exports of around £4 billion a year, the UK’s trade deficit in goods would be 3% larger.

“And our research published today emphasises the value of the industry which adds £5 billion to the economy annually and supports more than 40,000 jobs.

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“Burns Night is the perfect time to raise a dram to the success of Scotch. But we are calling on the Government to ‘stand up for Scotch’ by addressing the high and unfair level of taxation distillers face in their home market.

“The current tax of 77% on an average priced bottle of Scotch is a burden on consumers and the industry.”