Scotland and the Politics of Drink

Whisky may be Scotland's national drink, but its politicians rarely see eye-to-eye with the industry…

IN THE SUMMER of 2015, Ian Wright, director of the Food & Drink Federation, went to a meeting at Westminster, writes Tom Bruce-Gardyne for WhiskyInvestDirect.

“A government minister said to the deputy chief medical officer: 'What's the hierarchy of evil?'" he recalled," and she said, 'Well, I'd go tobacco, sugar, alcohol.'" If the demon drink has been pushed into third place, he is taking some of the credit. In a former life, Wright was corporate affairs director for Diageo.

Up in Scotland, however, booze – and particularly whisky – is still very much in the political cross-wires.

Four years ago the SNP managed to pass its long-cherished bill on minimum pricing of alcohol, only to see it disappear into a thicket of legal challenges sponsored by the Scotch Whisky Association (SWA). After a leisurely trawl round the European Court of Justice the bill returned to Edinburgh, where judges ruled in September that it was legal. In November the SWA decided it would appeal again, this time to the UK Supreme Court.   

Repeatedly thwarting the will of the Scottish parliament may not be the smartest move politically and the SWA's latest decision didn't play that well in the media. There are those in the industry who agree with minimum pricing, given that, at 50p a unit or £14 for a bottle of Scotch, most mainstream brands and certainly all single malts sit above that threshold.

On the other hand, the SWA probably felt it had little choice but to fight on. After all, there is not much love lost between the industry and the Scottish government.

The regime at Holyrood claims it is not anti-alcohol. But this is disingenuous. Behind minimum pricing is the desire to slash consumption and therefore sales of drink in Scotland by as much as half. The SWA has consistently argued that the measure is likely to prove ineffective, in which case the 50p rate will doubtless rise until the market does shrink. And at that point blended Scotch will be hit right where it hurts.

Meanwhile, this year's SNP conference saw renewed calls for a Scottish government task force to examine the industry and see what extra revenue could be squeezed from it.

Four years ago Professor John Kay, a former economic adviser to the Scottish government, claimed the benefits from Scotch to its homeland were “really quite disappointing” because the largest producers were not based in Scotland. To redress the balance, he proposed a £1 a bottle tax on production, to raise a £1.04 billion – a tantalising sum for people like Bill Ramsay, the SNP trade unionist behind the task force idea. “If it were left to me,” he declared in July, “I would do what Peter the Great did with vodka and make Scotch a state monopoly, but I am not Scotland's finance minister.”

As the industry's biggest player, Diageo takes much of the flak. Its decision to close its Kilmarnock bottling hall and shift operations to Fife in 2009 was a strategic business decision, but in no time the

First Minister, Alex Salmond, was leading a protest march 'to defend Johnnie Walker'. In fact, the striding man had left his home town years ago and has been living it up in Amsterdam, but that's another story. Now Diageo is trying to close its final pension scheme which has brought the threat of pre-Christmas strikes in Scotland.

Will politicians get involved? You bet they will – for booze is nothing if not political north of the border.