Scotch whisky exports decline in first half of 2014
Exports to United States decreased 12 percent in volume sales
Although Scotch whisky exports to some key markets, such as France, increased during the first half of 2014, the overall trend was downward with economic headwinds and uncertainty having an impact, according to the Scotch Whisky Association (SWA), Edinburgh, Scotland. From January through June 2014, Scotch whisky sales amounted to approximately $2.89 billion. This marks an 11 percent decline in value sales compared with the prior-year period.
Following a decade of fast growth, the demand for Scotch whisky is levelling off in some markets, the SWA reports. However, the association has confidence in the long-term future of Scotch whisky, with many projects for new distilleries under way and up to $3.27 billion of capital investment in Scotland committed by producers, it says.
In the first half of the year, Scotch whisky exports to France grew by 3 percent to 86 million bottles, making it the biggest market by volume, and by 6 percent in value sales to $344.8 million, putting it in second place behind the United States in terms of value. Exports to the United Arab Emirates (UAE) were up 21 percent in volume and 26 percent in value, with that area acting as a distribution hub for parts of Africa, Asia and India. Scotch whisky exports to India increased 33 percent in volume and 31 percent in value, which shows the potential opportunities there, the SWA notes. Several other Top 20 global markets experienced both volume and value growth, including Japan, the Netherlands and Turkey, it reports.
However, many major markets in Asia and the Americas, including China, Singapore, Mexico and the United States, experienced declines in Scotch whisky exports. The SWA attributes these declines to anti-extravagance measures in China, economic slowdown in some markets, a stronger pound sterling and de-stocking. Nevertheless, in all of these markets, the whisky category remains popular, and the long-term prospects are good, the SWA states.
Scotch whisky exports to the United States dropped 12 percent in volume and 16 percent in value sales during the first half of 2014, according to SWA data. Yet, the United States remains the No. 1 Scotch whisky export market in terms of value and the No. 2 export market in terms of volume, it notes.
“We are confident that Scotch whisky will continue to grow in the long-term as markets stabilize and new ones, such as emerging economies across Africa, open up,” said SWA Chief Executive David Frost in a statement. “However, it is clear that, in the short-run, there are economic headwinds affecting exports.
“The latest figures also act as a reminder that the success of Scotch whisky can’t be taken for granted,” he continued. “We need support from government to beat down trade barriers and help us access new markets overseas. That is why we are determined to play a full part in the forthcoming debate about further devolution, so that it enables a supportive business environment to ensure the future success of Scotch Whisky.”