A combination of 25% US import tariffs and COVID-19 caused exports to North America to tumble by one-third to £729m in 2020. Now that trend is reversing thanks to a five-year tariff suspension and slow but steady global recovery from the pandemic.
The latest figures show total Scotch exports up 31% for the first half of 2021 compared with H1 2020. According to the Scotch Whisky Association, exports totalled £2.2 billion with volumes up 42% on the same period in 2020 to 597.8 million bottles.
“The pace of recovery of Scotch whisky exports is very promising”, commented SWA chief executive Karen Betts. “Last year, the combination of US tariffs and Covid-19 brought Scotch whisky exports to their lowest level in a decade, so it’s encouraging to see them start to regain strength.”
There is still some way to go until Scotch exports hit pre-pandemic levels, with exports in H1 2021 still lagging 10% behind H1 2020. This is especially evident in the North American market, where exports remain 34% lower than H1 2019 with a total value of £487.4m.
Other markets showed strong signs of recovery, including France which is currently the second largest market for Scotch. Here exports reached £195 million in H1 2021, an increase of 16.55% on the same period in 2020. Note that this is still 10.3% below the figures for H1 2019.
One part of the world where Scotch exports have recovered and even exceeded pre-pandemic levels is China. Here exports grew 125% in H1 2021 compared with the whole of 2019, surging from £89 million across the whole year to £91 million in just 6 months.
“Our industry will need support to recover fully from the turbulence and lost exports of the last couple of years”, added Betts. “As part of this, the UK government must commit to completing the long-awaited review of alcohol duty, and to living up to its manifesto commitment to ensure that Scotch whisky is treated fairly against other categories of alcohol.
“As we continue to wait for this promise to be delivered, there are other opportunities the government can pursue to boost the industry’s recovery in global markets. Reducing the 150% tariff on Scotch whisky in India must be the UK government’s top priority when trade negotiations begin later this year.”
Scotch may be well on the road to recovery, but only time will tell how the UK government will respond to the multiple challenges facing the industry.