Scotch whisky industry invests to fuel export growth

By Guy Montague-Jones

- Last updated on GMT

Related tags Whisky Investment Scotch whisky association

Scotch whisky distillers are continuing to invest in new facilities and equipment to fuel the spread of the spirit in international markets.

Annual figures published last week by the Scotch Whisky Association (SWA) reveal that exports rose by 3 per cent in value terms in 2009 to £3.13bn, while volumes were up 4 per cent.

SWA spokesperson David Williamson told “International growth of both blended whisky and single malt mitigated for weaker domestic markets.”

International spread

Williamson added that the continued spread of whisky in international markets has ensured that distillers continue to invest.

Over the last two years, he said the industry has spent £600m on capital as big distillers like Diageo and Edrington as well as smaller rivals built new facilities, extended old ones, and invested in bottling and warehouse capacity.

Much of this spending will be supporting growth in foreign rather than home markets.

The depressed state of the economy and significant increases in duty on spirits in the UK over the past two years have conspired to dampen the scotch whisky market in the country.

But just over the channel in France scotch whisky is enjoying continued growth. SWA said shipments to France were up 13 per cent in value to £407m.

Global export data

This makes France one of the biggest whisky drinking countries in Europe as total shipments to the EU total £1.26bn.

Some of the smaller more emerging markets performed well last year, especially in the Americas.

Shipments to Central & South America rose 18 per cent last year to £390m, helped by the persistent strength of the economies in the region. Whisky had a particularly good year in Brazil – shipments were up 44 per cent to £60m.

In the North American region, Mexico was also a strong performer – with a promising 25 per cent increase in shipments to £42m.

Despite the recession, Americans did not lose their taste for scotch whisky last year as the largest export market by value came in with 13 per cent growth to £419m.

But whisky did not win consumers over in every overseas market.

In Asia, shipments fell 9 per cent by value to £543m and shipments to Germany and Spain were also weak. This meant that despite the positive figure for France, exports to the EU were down 1 per cent.

However, overall the SWA was upbeat about the scotch whisky market. Paul Walsh, chairman of the SWA, said: “Scotch whisky distillers have delivered record exports in the face of a global economic downturn. It is an impressive performance.”

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