Scotch whisky enjoys bumper year of trading in south-east Asia

The UK Government hopes sales to Indo-Pacific countries will improve next year after negotiating a trade deal in the region

Scottish whisky and gin distillers have enjoyed a bumper year in exports, making huge profits in south-east Asia.

In the past year whisky sales have increased by 31 per cent (£91 million) in Singapore and 43 per cent (£11m) in Malaysia. Whisky is continuing to dominate the Singapore market, with more than £380m worth exported to the country in the past year alone.

The UK Government is now hoping this will only increase next year when the UK formally joins an Indo-Pacific trading bloc known as CPTPP.

The Isle of Harris Distillery is based in Tarbert (pic: Laurence Winram studio)

The CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) is a free trade agreement between 11 countries that has been operating since 2018, and includes Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, Vietnam and Japan.

The UK concluded negotiations to join this trading bloc in March, and from July will become official members. Once this happens, distilleries will have 0 per cent tariffs on their exports.

One of these businesses is Isle of Harris Distillers in the Outer Hebrides. The distillery launched its first whisky The Hearach in September, and Harris Gin has helped to drive a 56 per cent increase (£3m) in UK gin exports to Singapore in the past year.

Peter Kwasniewski, international business development manager at Isle of Harris Distillers, said: “Exporting is a great way for a business to grow sustainably and at a faster rate than just domestically and exporting to CPTPP is becoming an increasingly important part of our business, and we’ve seen an encouraging boost to our sales to member countries over the past year.

The Isle of Harris Distillery is currently known for its Harris Gin (pic: Laurence Winram studio)

“Consumers worldwide are looking at drinking less, but higher-quality products.

“There is a clear demand for super premium quality products such as the Harris Gin and The Hearach single malt whisky we distil, and once Britain becomes a full member of the trading bloc this should only improve things further with making the products more easily accessible to international consumers.”

Exports of Scotch whisky to countries in the CPTPP have grown “significantly” in the past ten years, collectively reaching more than £1.1 billion in 2022.

Mark Kent, chief executive of the Scotch Whisky Association, said the trade deal would open up new opportunities and other markets, particularly in Malaysia.

Jonathan Brenton, director of public affairs for Chivas Brothers, said: “The Pacific rim is already the world’s most economically dynamic region and five CPTPP members are in the top 20 markets for our Scotch whiskies.

“CPTPP will reduce whisky tariffs in Malaysia to zero and will help us leverage the growing middle class and a trend towards premium products and cocktail culture in other south-east Asian countries like Vietnam.”

The Indo-Pacific region is set to account for the majority of global growth, something the UK Government says presents a “huge opportunity” for UK businesses.

UK business and trade secretary Kemi Badenoch told The Scotsman: “This Christmas our fantastic British food and drink producers are already reaping the rewards of the UK’s tilt towards the Indo-Pacific, with high demand in fast-growing economies such as Singapore and Malaysia for our world-renowned festive staples.

“Once we become a fully-fledged CPTPP member, tariffs on more than 99 per cent of UK good will be set at 0 per cent, ensuring even more people across the globe will be able to celebrate next Christmas with a dram of Scotch whisky.”