Export growth returns for Scotch whisky in 2016

Strongest Scotch whisky exports in 3 years as Brexit hits Pound, US demand jumps...

AFTER a difficult 2014 and 2015, exports of Scotch whisky returned to solid growth in 2016, writes Leon Kuebler for WhiskyInvestDirect.

The latest figures posted by HMRC show the strongest exports of Scotch whisky since 2013, helped both by the Pound falling after the Brexit referendum and also by strong growth in consumer demand worldwide, led by No.1 market the United States.

The Scottish whisky industry shipped a total of 337.3 million Litres of Pure Alcohol (mLPA) worldwide last year – the equivalent of over 38 bottles per second – worth £3.98bn overall.

These results marked a notable improvement on those of 2015, when 324.0 mLPA was exported to the tune of £3.85bn.

As a result, worldwide Scotch exports in 2016 were up by 3.3% in value and 4.1% in volume when compared to the previous year. They were also higher than the £3.95bn, 333.8 mLPA exported in 2014.

Scotch has benefitted from the continued weakness of the Pound in the aftermath of the June 23 referendum of EU membership, which has made UK exports cheaper to foreign buyers.

Prior to the EU referendum, the Sterling value of Scotch exported in the first half of 2016 was down 1.0% on the same period of 2015, despite a 3.2% rise in the amount of Scotch dispatched during this period. By contrast, in the last six months of 2016, Scotch exports rose 6.8% in value, while volume shipments were up 4.8%.

Yet the improvement in Scotch's fortunes was not only due to the weaker post-Brexit Pound. In fact, each quarter of 2016 experienced an increase on the previous year's figures – growing 2.5% in Q1, 3.7% in Q2, 1.8% in Q3 and 8.0% in Q4.

This is the first time that growth has occurred in every quarter of a year in this decade.

 

Scotch performed well in most regions. In the European Union, North America and Asia & Oceania, which account for 78% of the value worldwide Scotch exports, both the volume and the value of Scotch imported were higher than in 2015.  

On a country level, exports to the United States, the largest market by value for Scotch, have risen by 14.2%. Although the value of Scotch sent to France, the second most-valuable Scotch market, and Taiwan (4th) dropped by 4.1%, and 4.0% respectively, there were increases to Singapore (3rd, 6.4%), Spain (5th, 7.5%) and Germany (6th, 6.4%).

For Spain, this was the first year that imports of Scotch rose in value since 2007.

Scotch also had a record year in India, with shipments growing 13.8% to £96.5m. India is the largest consumer of whisky in the world, but Scotch has hitherto only represented a fraction of this market, which is dominated by domestically-produced brands.

Malt whisky performed particularly well in 2016. Sales of single malt grew 9.6% in value on 2015, and now accounts for 9.0% of the total volume Scotch exported worldwide.

Blended Scotch whisky exports also experienced value growth of 0.3%, while the total volume of blends shipped was up 2.2%.