Gavin Hewitt: Minimum pricing's threat to whisky trade too much to swallow

THE Scottish Government's reluctance to accept that Scotch whisky will be affected by minimum pricing is disappointing and misguided.

Yesterday's letter to this newspaper by health secretary Nicola Sturgeon (Critics of drink plan ignore reality, The Scotsman, 26 January) was another example of the government's lack of understanding of the domestic and international trade realities facing the Scotch whisky industry.

The government's claims are wrong in terms of the impact the blunt instrument of minimum pricing will have on those who earn a living producing and selling one of Scotland's key products.

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Our exports are vulnerable to action by other governments to discriminate against spirit drinks, and Scotch whisky in particular.

About a third of the Scottish market for Scotch whisky is threatened by the government's indicative 40p minimum price. A 50p minimum unit price which others are calling for would increase the price of an averagely priced bottle by over 30 per cent.

Economic analysis and experience also suggests that some 20 per cent of potential Scotch whisky exports could be lost through copycat minimum pricing and discrimination.

At a time when the industry is shipping something like one billion bottles to markets around the globe – helping to support economic recovery – it would be folly to introduce new legislation that could seriously damage the industry and its wider Scottish supply chain.

Key export markets are already seeking ways to restrict access by Scotch whisky.

In South Korea, there is the threat of a health tax targeting Scotch, while Chile and Thailand called for new trade restrictions just last week. In India, where I was last week trying to open up the market for Scottish distillers, there is considerable push-back, citing Scottish Government proposals on minimum pricing, on making Scotch whisky more accessible and affordable to the Indian consumer.

The introduction of a Scottish trade barrier in violation of EU and World Trade Organisation rules is just the excuse overseas governments need to further target Scotch whisky exports. As the Scottish Government does not have a global trade policy remit, its promise to help us on such issues is meaningless.

The Scotch whisky industry and Scottish Government agree on the need to address alcohol misuse in Scotland. In the coming weeks, my challenge to MSPs is to agree on balanced steps to tackle alcohol-related harm.

Polarisation of the debate does not help. Surely we can introduce effective measures that target problem drinkers but don't risk local jobs, both in the whisky industry and across our supply chain.

Alternative, legal measures to stop the loss leading of alcohol should be considered. We should also ensure that existing licensing laws are more stringently enforced to tackle those who might be prepared to sell alcohol to underage drinkers. Our efforts should be focused on those who drink to excess.

Alcohol misuse must be addressed and we welcome most of the Alcohol Bill. We should work together to agree an effective, balanced way forward, rather than pursuing a pricing mechanism that is likely to be both illegal and fails to target the problem drinker.

Against that background, I hope we can have a more constructive debate about how we can work together to both tackle alcohol misuse and to support the industry. It is possible to stand up for sensible measures to tackle alcohol misuse and, at the same time, stand up for Scotch whisky.

• Gavin Hewitt is chief executive of the Scotch Whisky Association