The Department for Environment, Food and Rural Affairs (Defra) said it would open a consultation on introducing tighter definitions on how Scotch whisky can be classified, which would require the product to be fully matured in Scotland. The proposals will further crackdown on the definition of whisky, leading to the possibility of some producers having to re-label its goods accordingly or face costly restructuring.
These changes, which will supplement existing rules on spirit drinks set out by the EU, are expected to be put in place by Spring next year through secondary legislation as an amendment to existing laws, Defra added. If the amended regulations are passed, the Scotch Whisky Association will then be able to use the tighter definition of the product to pursue legal action overseas against producers it claims are illegally manufacturing the spirit.
These amendments will require Scotch whisky to be classified under one of five definitions, which must be used on labelling. These definitions will be: Single Malt Scotch whisky, Single Grain Scotch whisky, Blended Scotch whisky, Blended Malt Scotch whisky and Blended Grain Scotch whisky.
Five regional categories will also be initially allowed for use on labels including Highland, Lowland, Speyside, Campbeltown and Islay, with the possibility of additional protected regions added later. However, these regional labels will not be available for products that are not wholly made in the region. This will also apply to labels and promotional material using a name linked to a specific distillery, if it is not produced at the relevant site.
Scotch whisky must also be wholly matured in Scotland, with export strictly prohibited unless a product has first been bottled and labelled in the country. Exports in wooden casks would also be prohibited. Des Browne, Scotland's secretary of stat, said at the launch of the new proposals that the amendments were vital to protect the industry in the ever changing global spirits market.
"This is another example of the UK government working in a reserved area to protect one of Scotland's most important exports," he stated. "Scotch whisky exports are worth over £2 billion to the Scottish economy each year and the industry needs this proposed legislation to help maintain that figure and defend its high-value product from imitation in some overseas markets." In 2006, Scotch whisky exports rose four per cent in value over the previous year to £2.5bn according to the Scotch Whisky Association. The rise means beat the previous annual sales record of £2.4bn in 1997, reflecting healthier optimism in the market.
In August, Spirits group Bacardi announced a ten-year $250m (€183m) investment plan for production of its Scotch whisky brands amidst growing demand in emerging markets like Asia for the product.