Karen Betts: Brexit raises questions for Scotch whisky industry

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Scotland’s bard will forever be associated with Scotch whisky. From his 1785 poem “Scotch Drink” to his employment as an exciseman in Dumfries, Robert Burns truly lived and breathed it. 

However, the industry that Burns knew was light years from where we are today. Burns spent his time clamping down on illicit stills and musing about the beauty of whisky. Today, Scotch whisky has become Scotland’s biggest export and a global phenomenon: it accounts for 40,000 jobs across the UK, including 7,000 in Scotland’s rural communities, and it is sold in nearly 200 markets around the world. 

What would doubtless have raised a smile for Burns is that, these days, £4 in every £5 spent on Scotch goes straight to the Treasury.

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The industry has made huge technological strides that would have been unimaginable even to Burns in the two centuries since his death. While pot stills still distill much as they have always done and while Scotch’s three constituent parts – water, barley and yeast – are as they ever were, innovation across the industry has been transformative. The industry has increased its use of non-fossil fuel from 3% in 2009 to 17%, robotics and other innovative solutions now take some of the back-breaking strain out of coopering, and we are creating biofuels and animal feed from our byproducts.

The export success of Scotch has been built over years by following in the footsteps of early entrepreneurs like Tommy Dewar, Johnnie Walker and James Chivas, who travelled the world in the 19th century, creating a global market for our national drink. Now a new generation of whisky entrepreneurs are taking single malts and premium blends to the modern consumer in a similar way.

Despite the industry’s outward-looking history, Brexit brings undoubted uncertainty. Like other businesses across Scotland and the UK, we have grown used to ready trade with our European neighbours, with a third of all Scotch exports going to the EU. We are keen to know now what the arrangements will be for the future. How will our industry be regulated at home? How will we continue to trade with Europe? What will leaving the EU mean for trade with other markets that are important to us, such as India or South Korea?  

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But those uncertainties also contain opportunities – not least, the chance to forge new, close ties to key markets. One such market is the US, where I delivered a speech at the British Consulate in New York last night. Scotch whisky enjoys a special relationship with the US. Not only is it the biggest market in terms of export sales, representing £1 in every £5 of Scotch whisky exports and valued at over £850 million in 2016, but the US is home to a quarter of all the statues dedicated to Robert Burns. 

We believe, if our industry is to emerge in growth from Brexit – critical for the livelihoods our industry supports – then the UK must take the opportunity of Brexit to pursue ambitious free trade deals with India, China and other emerging markets, and work to remove protectionism in markets such as Thailand.

This year presents a series of opportunities to support this wave of dynamism across the industry. If we can get Brexit right for Scotch both at home and in our export markets around the world, the future for Scotch whisky, in 2018 and beyond, looks bright.

So raise your dram tonight, not just to Rabbie Burns, but to the future of Scotch whisky.

Karen Betts is the CEO of the Scotch Whisky Association