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6° Milano Whisky Festival. Photo by Bruno Cordioli
Post ID: 2040 | POSTED ON: Sep 22, 2014

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EDINBURGH, SCOTLAND  — Sales of Scotch whisky plummeted during the first half of 2014, with exports to key markets in Asia and the Americas reporting some of the worst drops in decades, the Scotch Whisky Association (SWA) reported on Monday, saying government support is needed to beat down trade barriers.

Figures published by the association showed that exports of Scotch in the first half of the year were 1.77 billion pounds ($2.89 billion), down 11 percent from 1.99 billion pounds ($3.24 billion) in the same period of 2013. The figures indicate that demand for Scotch is leveling off in some markets after a decade of fast growth.

“We are confident that Scotch whisky will continue to grow in the long-term as markets stabilize and new ones, such as emerging economies across Africa, open up,” said SWA chief executive David Frost. “However, it is clear that in the short-run there are economic headwinds affecting exports.”

The decline was visible in many key markets in Asia and the Americas, with exports to Singapore alone dropping a staggering 46 percent in the first six months of the year. Exports to China dropped by 39 percent, to Latvia by 32 percent, to Mexico by 27 percent, to Germany by 22 percent, to South Korea by 12 percent, and to the United States by 16 percent.

The association blamed the decline in China on anti-extravagance measures there, while other declines were blamed on the economic slowdown in some markets, a stronger pound sterling and de-stocking. “But in all these markets the whisky category remains popular and the long-term prospects are good,” SWA said.

Some of the losses were offset by substantial increases in other key markets – such as France and Taiwan – in the first half of the year. Exports to France grew by 3 percent to 86 million bottles, making it the biggest market by volume and the second-largest in terms of value. Exports to the United Arab Emirates (UAE), which acts as a distribution hub for parts of Africa, Asia and India, were up by 26 percent.

India reported the largest growth among top Scotch whisky markets, with exports to the Asian country rising by 31 percent.

“The latest figures act as a reminder that the success of Scotch whisky can’t be taken for granted. We need support from government to beat down trade barriers and help us access new markets overseas,” Frost explained. “That is why we are determined to play a full part in the forthcoming debate about further devolution, so that it enables a supportive business environment to ensure the future success of Scotch Whisky.”

Richard Lochhead, Scotland’s Cabinet Secretary for Food, said Scotch whisky remains an iconic product but is not immune from economic difficulties across the globe. “I look forward to working with the industry to develop new and existing markets, in line with the Scotland Food & Drink Export Plan, and as we work towards the further devolution of powers promised by the UK Government and others in the past few days,” he said.