The 13th February saw the release of the latest UK export figures released for December 2024, and by extension, the export statistics for the whole year of 2024. It made good reading for some exports, but Scotch whisky was one of the industries that were a slightly less joyous. Although it remains the UK’s largest food and drink export with a total export value of £5.4 billion, the value of exports was down 3.7% on 2023 (the volume export was increased by 3.9% in the same period). Not all bad news, but not all good either. So where does this leave the industry?
Unfortunately, the outlook is not rosy, at least from the perspective of the Scotch Whisky Association (SWA). Challenging and turbulent trading conditions across the globe, the looming spectre of significant US tariffs (the USA remains the #1 market ranked by value), and the persistent pressures on consumer spending have the industry worried about the year, and years, ahead. When we consider the level of excise duty on whisky within the UK, and the impact of inflation on the prices of the input components (grain, energy, transport), it seems that everything is going against Scotch whisky. Very few, if any, of these difficulties appear to have easy remedies so the questions for the industry could remain into the near future.
In their response to the release of the export figures for 2024, the SWA were forthcoming in asking the UK and Scottish Government’s for more support to negotiate the choppy waters of international trade, as well as providing some form of mitigation for the home markets. Will that happen? While both Governments have voiced promises to support home businesses, including Scotch whisky and the wider supply chain, there is no sign that drastic changes are afoot. Drinkers themselves are struggling to help by buying more whisky as prices continue to soar at a time when the cost of living also rises. Spending on whisky is becoming an increasing luxury for many people.
If we look at the other big Scottish export, farmed salmon, it has just hit a new record export high despite encountering many of the same challenges, although national taxation is less of an issue. The main driver of that growth is primarily demand, as well as having the equivalent supply. Scotch whisky definitely has the supply (it could be argued that there is too much supply but given the exported volume is rising, I do not think it is a primary factor), but the demand is perhaps waning in some markets and changing among consumers in others. Driven by the increase in other whisky producing countries, some of the core whisky export markets are altering as they supply themselves. The USA is producing more and more whisky all the time, and in December the US Government’s Alcohol and Tobacco Tax and Trade Bureau (TTB) recognised, defined and protected American Single Malt Whiskey in regulation. This change will likely only increase the domestic market of single malts in the USS, potentially edging out some of its Scottish equivalent. Single malt is the product taking the biggest hit on the worldwide market so this is not exactly welcome news, especially as it is often the more pricey, and thus valuable, option. Amongst all the gloom of the latest figures though, blended whisky is on the way up. Perhaps this is a sign of changing tastes on the world market. Maybe it’s a signal that blends are preferred as they are usually at a more attractive price point. It bears watching whether this trend continues throughout 2025 as it may eventually start a shift in Scottish production, time will tell.
When we consider all the factors at play, it is obvious that decisions will have to be made. In an ideal world, trade deals would be smoothed out, tariffs avoided or at least minimised, inflation slowed down, and other appropriate support provided where needed to increase both the export and the home markets, securing jobs and giving the industry confidence to invest. In a less ideal world? Then potentially we see distilleries closed, businesses shuttered, and jobs lost. We are not quite there yet but the recent announcement of the periodic shutdown of Glenglassaugh distillery by Brown-Forman (coupled with complete closures in their US division) gives an indication of where the industry might be heading. It should be in everyone’s interest to not let the situation worsen, whilst still making sure that quality whisky, well-paying jobs and the correct tax is paid. It’s a tough line to tread, but better to find a way through it now rather than waiting for a worse outcome to befall the industry.
Sean black - Freelance writer 