In the first half of this year, due to "volatile" geopolitical and economic conditions, whisky exports from Scotland saw a sharp decline. Industry leaders have warned Prime Minister Keir Starmer that the sector "cannot afford to be complacent."

New data released today by the Scotch Whisky Association (SWA) shows that whisky exports fell by 18%, or £463.2 million, compared to the first six months of 2023, bringing the total to £2.1 billion. Of the top five markets, only India saw an increase in export value.

Exports to India are considered a long-term hope for the industry. In the first half of the year, exports to India surged by 11.9%, reaching £105.7 million. India is now the largest market by volume, with export volumes rising by 17.3% to 85 million bottles.

However, shipments to France, the industry’s second-largest value market, plummeted by nearly a third to £158.5 million.

In the UK’s most profitable market, the United States, whisky exports fell by 3.5% to £421.4 million. Exports to Singapore and Taiwan also saw steep declines, dropping by 22.3% to £128 million and 21.5% to £117.1 million, respectively.

Exports to China plunged by 42.4%, reaching £77.9 million, reflecting the recent difficulties distillers are facing as economic growth slows.

Meanwhile, total export volumes dropped by 10.2%, reaching 566 million 70cl bottles.

The SWA noted that the industry continues to feel the impact of the 25% import tariff imposed on single malt Scotch whisky by the Trump administration from October 2019 to March 2021. The tariff is estimated to have cost the industry £600 million in lost whisky exports and market share. Trump has indicated that he will reintroduce tariffs if he wins the U.S. presidential election in November.

Domestically, following the "disruptive" impact of the 10.1% alcohol duty increase implemented by the UK’s previous government in August last year, the SWA urged the Prime Minister to reduce the tax burden on distillers in the October 30th budget.

Mark Kent, CEO of the Scotch Whisky Association, said, "The Prime Minister has pledged to 'pull out all the stops' to support Scotch whisky producers. These figures are a reminder that Scotch whisky’s success cannot be taken for granted and needs government support to manage short-term fluctuations in the sector.

"Our industry is resilient, exporting to over 180 markets, and we are experienced in handling such volatile periods. We remain confident in Scotch whisky’s long-term growth opportunities. But it is clear that the first half of 2024 has been challenging, much like other premium global whisky exports. Given the turbulent international landscape affecting global industries and inflationary pressures passed down to consumers, this is not surprising."

Mr. Kent added, "The UK’s October 30th budget is the new Labour government’s first real opportunity to demonstrate its genuine support for Scotch whisky. Last year, the UK imposed a double-digit tax hike on Scotch whisky, the largest in 40 years, which has cost the Treasury nearly £300 million in lost tax revenue. Reversing this loss by cutting Scotch whisky tariffs would boost public finances and help the industry navigate this challenging period.

"Moreover, the data from the first half clearly shows that our largest market, the U.S., has not yet fully stabilized following the pandemic and the 25% tariff on single malt whisky. Permanently removing this tariff beyond the current five-year suspension would eliminate uncertainty, strengthen industry confidence, and allow us to focus on growth in this competitive spirits market.

"The UK government’s initiation of trade talks with India is also welcome. Although the current 150% tariff hinders future growth, exports to India remain the highlight of the first half of 2024. Securing a deal to lower tariffs would significantly boost the industry and help mitigate the slowdown in other global whisky export markets."

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