Scotch whisky exports leapt by more than 40% in the first half of the year, after plunging to their lowest level in a decade in 2020.
But, efforts to recover lost growth in the wake of Covid-19 and punishing US tariffs are being hampered by supply chain and distribution problems, the industry’s trade body has warned.
Figures from the Scotch Whisky Association (SWA) showed overseas sales rose by 42% in volume in the first six months of 2021, compared to the same period last year.
The value of exports also rose by 31%, but was still 10% below the record pre-pandemic level recorded in 2019.
Overseas sales growth ‘very promising’
SWA chief executive, Karen Betts, described the latest figures as “very promising.”
She said: “Last year, the combination of US tariffs and Covid-19 brought Scotch whisky exports to their lowest level in a decade, so it’s encouraging to see them start to regain strength.
But like many other sectors, Scotch whisky companies are feeling the ongoing impacts of trade disruption on our supply chain and global distribution, and the cost of goods and services has risen significantly.
“In addition, international tourism is yet to recover and global hospitality is some way from emerging from the impact of the pandemic.”
Scotch exports to Europe fell in the first three months of the year, compared to 2019, as lockdowns on the continent continued and distillers adjusted to new post-Brexit trading arrangements. But they grew at a faster rate between April and June than in the same period two years ago.
Sales in Asia, which were quick to recover in the second half of 2020, continued to grow in the first half of this year. China has already surpassed the £89m exported in 2019, growing by 126% to £91m.
US tariffs continued to hit sales
The US remains the biggest Scotch export market by value and was worth more than £1billion in 2019. But, the 25% tariff on single malts, imposed in October that year, contributed to a one third fall in total exports to £729m in 2020.
The tax hike was suspended in March, but the industry has warned it will take time, investment and support for exports to regain their strength. They remained down by 34% in the first half of this year, compared to 2019.
The SWA called on the UK government to back the industry, which supports 42,000 jobs and contributes £5.5bn to the economy, in the autumn Budget.
Ms Betts continued: “Our industry will need support to recover fully from the turbulence and lost exports of the last couple of years.
As part of this, the UK government must commit to completing the long-awaited review of alcohol duty, and to living up to its manifesto commitment to ensure that Scotch whisky is treated fairly against other categories of alcohol.”
She added: “As we continue to wait for this promise to be delivered, there are other opportunities the government can pursue to boost the industry’s recovery in global markets.
“Reducing the 150% tariff on Scotch whisky in India must be the UK government’s top priority when trade negotiations begin later this year.”