Scottish Government demands Westminster action on whisky slump

The Scottish Government is demanding action from Westminster to help Scotland’s flagship whisky industry after a 23 per cent fall in overseas trade over the past year.

Scotch exports have plummeted

Rural economy secretary Fergus Ewing says the industry has suffered a three-pronged impact from US tariffs, the coronavirus pandemic and enhanced Brexit checks, which has contributed to £1.1 billion being knocked off the value of exports.

He is now calling for action in a letter to UK environment secretary George Eustace.

Finance secretary Kate Forbes has also written to Chancellor Rishi Sunak calling for measures in the coming budget to support the industry.

But the UK Government insists it is working closely with the whisky industry to help it “take advantage” of post-Brexit trade deals now being struck.

Scotch whisky exports to the US have fallen by £542 million since a 25 per cent tariff was imposed in October 2019, while EU exports fell by 15 per cent as a result of the closure of hospitality and travel restrictions

Mr Ewing is now calling for Brexit-related issues such as delays to exports, additional certification and complications for UK labels given the implementation of the Northern Ireland Protocol to be addressed urgently.

He said: “It’s been a particularly difficult year for Scotland’s food and drink sector. A once booming whisky industry has seen overseas exports drop by 23 per cent in the last year alone.

“The whisky industry was already reeling from the triple threat of US import tariffs, the coronavirus pandemic slowing global demand, and a complicated alcohol duty system before Brexit compounded matters. Like many food and drink businesses, the sector is struggling with complicated bureaucracy post Brexit and it is vital that such issues are resolved as soon as possible.

“I have written to the UK Government urging them to address the problems and will do my utmost to help one of Scotland’s greatest food and drink success stories get through this challenging time.”

Ms Forbes has also written to the Chancellor ahead of the budget, calling on him to take further immediate steps to recognise and support the Scotch whisky industry, including reforms to the alcohol duty system to make it simpler.

“The industry contributes a significant amount to the Scottish and UK economies, providing skilled and stable jobs as well as contributing a substantial amount to GVA and UK tax receipts," Ms Forbes states in her letter.

"It is imperative, therefore, that the sector receives the recognition and assistance it needs from government to survive and thrive in these extremely challenging times."

It emerged yesterday the value and volume of exports to most of Scotch whisky’s top ten markets fell as countries went into lockdown to combat the spread of Covid-19 during 2020.

The Scotch Whisky Association (SWA) has also called on the Chancellor to cut spirits duty to mitigate the significant damage being done to the industry in his budget.

A UK Government spokeswoman said: “Scotch whisky is world-renowned, and we are working closely with the industry to help them take advantage of new export markets.

“The UK Government promotes the Scotch Whisky through the Food is GREAT campaign. Last year we announced £1m dedicated to showcasing Scottish food and drink exports around the world.

“We are confident the sector is well-positioned to benefit from the expansive trade deals that we are now striking.”

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