China leading Scotch growth in Asia

Related tags Whisky

China entered the top 20 markets for Scotch whisky for the first
time in 2004, accounting for an increasingly large chunk of sales
in the Asian region. And with per capita consumption still
relatively low, China could prove to be a major market for
Scotland's distillers in the future, writes Chris Jones.

Total exports of Scotch malt whisky reached 55 million bottles last year, with bottled malt sales topping £350 million globally for the first time and total exports breaking the £2 billion barrier for the twelfth year in succession, despite a 2 per cent drop in total volumes.

Some 40 per cent of this decline in volume sales came from South Korea, the previous jewel in the crown of Scotch exports to Asia, where economic troubles made whisky an unaffordable luxury for many consumers.

South Korea has been a particularly important market for premium blended whisky - the category between standard blends and single malts - in recent years, with many of the world's major Scotch producers (Diageo, Allied Domecq, Edrington) focusing on that particular category. But standard whisky sales have been declining steadily for several years, and a market built on high-end product sales was always likely to be the hardest hit by a decline in consumer spending levels.

Thankfully for Scotch producers, however, the Chinese economy is in robust good health, and increasingly affluent consumers are turning to western products as a sign of their growing purchasing power. As a result, Scotch whisky exports to China increased by 165 per cent in 2004 over £25 million, catapulting China into the top 20 for the first time. Just five years ago, Scotch exports to China were worth around £1 million, according to the Scotch Whisky Association.

Scotch is seen as a trendy drink by many young Chinese consumers, although their habit of mixing it with green tea would have most whisky aficionados shuddering in disgust. The most common consumption pattern is in groups, in nightclubs and bars, with a bottle shared among friends.

Although Scotch is yet to achieve the same cult status as Cognac among Chinese drinkers, producers are hopeful that the popularity of the drink - which is built largely on image rather than any clear appreciation of whisky - will one day be as great as the prestigous French brandy, even though if mainland Chinese per capita consumption were to reach the same level as it currently is in Hong Kong or Taiwan, the country would account for the entire output of every Scottish distiller.

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