SCOTCH WHISKY EXPORT TO USA GETS TEMPORARY REPRIEVE

TRUMP'S tariffs on Scotch whisky suspended

REGULATION INITIALLY APPLIES FOR FOUR MONTHS

03 March 2021 brought in great news for British exporting companies in that the US has suspended the retaliatory tariffs on imports of British goods, including Scotch whisky, for the next four months. The caveat is that during this time, existing disputes between the USA and Great Britain must be resolved. The decision by Trump came about after that person’s thoughtless decision on stultifying tariffs resulting from EU subsidies for aircraft manufacturer Airbus, in which the US saw competitive disadvantages for their Big-tech aircraft manufacturer Boeing.

The Scotch Whisky Association (SWA) squarely blamed the 25% US tariffs introduced sixteen months ago for the sharp decline in Scottish exports last year as reported, and has repeatedly called on the British government to stand by the distilleries.

Reacting to the Biden Administration’s decision, SWA breathed a sigh of relief. Suspending these tariffs – stemming from a transatlantic trade dispute that had nothing to do with the whisky industry – and a return to tariff-free trade with the US means livelihoods and communities across Scotland will be protected. Companies can now really focus on recovery – on building back the American market as well as on building back global exports hit by the coronavirus pandemic.

Scotch whisky export figures for 2020 have now been released, with the industry experiencing a ‘lost decade of growth’ as tariffs and Covid hit exports hard. Compared to Scotch whisky, other spirits categories, including tequila, mezcal, Cognac and American whiskey, performed positively in the US market during 2020, according to a report released by the Distilled Spirits Council of the United States.

Global exports of Scotch whisky fell by more than £1.1bn during 2020, according to figures released today by the Scotch Whisky Association (SWA). The export figures are the lowest they have been in a decade, as the combined impact of Covid-19 and the 25% tariff in the United States hit distillers hard.

In 2020, the export value of Scotch whisky exports fell 23% by value to £3.8bn. The number of 70cl bottles exported fell by 13% to the equivalent of 1.14bn.

The value and volume of exports to most of Scotch whisky’s top 10 markets fell as countries went into lockdown to combat the spread of Covid-19 during 2020. The closure of hospitality and travel restrictions impacting airport retail globally saw export values fall in 70% of Scotch whisky’s global markets vis-a-vis 2019. Exports to the EU 27, the industry’s largest regional export market, fell by 15%.

The continued impact of tariffs on exports of Single Malt Scotch whisky to the United States caused the most significant losses. The United States is Scotch whisky’s most valuable market, valued at over £1bn in 2019 when it accounted for a fifth of global exports. In 2020, exports of Scotch whisky to the US fell by 32% to £729m, a loss of £340m compared to 2019, and accounting for around one third of total global export losses. 

The industry repeated calls for more support for Scotch whisky distillers in the UK budget on 03 March seem to have done the trick, even if vicariously. Export losses to the US are in large part a result of the 25% tariff on Single Malt that the industry is forced to pay, because of a continuing dispute between the EU, UK and US governments over subsidies granted to Airbus and Boeing.  Given the tariff has arisen as a result of UK government aerospace policy, the SWA called on the Chancellor to cut spirits duty to mitigate the significant damage being done to the industry.

The Scotch Whisky Association added that these figures were a grim reminder of the challenges faced by distillers over the past year, as exports stalled in the face of the coronavirus pandemic and US tariffs. In effect, the industry lost 10 years of growth in 2020 and it’s going to take some time to build back to a position of strength.

In these challenging times, what was most disappointing was the damage being caused by US tariffs. The US has been, for decades, Scotland’s strongest and most valuable market, but Scotch whisky is now losing considerable ground there. These tariffs were avoidable had the UK, EU and US governments and the European and American aerospace industries been less intransigent. That governments and companies allowed their dispute to continue while the livelihoods of real people, and the future of one of Scotland’s oldest industries, were put at stake reflected badly on them.

          2020 Export Summary

•         Export value of Scotch Whisky in 2020 was £3.8bn, down £1.1bn compared with 2019
•         Export volume of Scotch Whisky in 2020 was the equivalent of 1.14bn 70cl bottles, down 12.6%             compared with 2019
•         Exports have fallen in 127 of 179 global markets
•         Exports by value are now at their lowest level since 2010 when £3.48bn was exported

US Tariffs Impact

• Scotch Whisky exports to the US were valued at £1.07bn in 2019 – the industry’s first billion pound market
• In 2020, exports of Scotch Whisky to the US fell by 32%, or £340m
• Since the 25% tariff was imposed in October 2019, Scotch Whisky exports to the US have fallen 35% or £542m
• Compared to Scotch Whisky, other spirits categories, including tequila, mezcal, Cognac and American whiskey, performed positively in the US market during 2020, according to a report released by the Distilled Spirits Council of the United States.                         

TOP 10 MARKETS  

The largest export destinations for Scotch Whisky (defined by value) in 2020 were:                           

Country	Exports in 2020 £m	Change in %	Exports in 2019 £m
USA	729	–31.8	1,069
France	375	–13.1	432
Singapore	247	–17.6	300
Taiwan	182	–11.5	205
Latvia	176	+23.6	142
Germany	139	--24.9	185
Japan	114	--22.1	147
Australia	113	--3.17	117
Spain	109	--40.0	180
China	107	+20.4	89


The largest export destinations for Scotch Whisky (defined by volume, 70cl bottles) in 2020 were:                           


Country	Bottles in 2020 m	Change in %	Bottles in 2019 m
France	176	+1.50	173
USA	112	--12.3	127
India	95	--27.8	131
Brazil	45	+5.70	43
Japan	45	-26.2	60
Germany	43	--14.3	50
Mexico	42	--17.9	51
Latvia	39	+11.9	35
Poland	37	+14.6	33
Spain	36	--26.1	57


REGIONAL DATA

In 2020, Scotch Whisky exports by global region (defined by value) were:

Region	Exports in 2020 £m	Change in %	% of global exports
European Union	1.256 bn	–15.1	33
Asia and Oceania	998	–19.4	26
North America	904	–29.6	24
LatAm and Caribbean	260	–31	07
Africa	137	–22	3.6
MENA	121	–49.4	03
West Europe (non-EU)	93	+11.5	02
East Europe (non-EU)	35	–4.8	01

 




 

ALDI AND LIDL SMASHING SPEYSIDE AND ISLAY WHISKIES

 GERMAN SUPERMARKET GIANT LIDL’S AGED EXPRESSIONS

Speyside single malts are single malt Scotch whiskies distilled in Strathspey, the area around the River Spey in Moray and Badenoch and Strathspey, in northeastern Scotland. Strathspey has the greatest number of distilleries of any of the whisky producing areas of Scotland. Dufftown alone has six working distilleries with an annual capacity in excess of 40 million litres of spirit. Roughly 50 percent of Scotland's whisky is made here in the approximately 50 distilleries located in this region.

This dry, warm, region is a natural for whisky distillers because it is close to barley farms, contains the River Spey and is close to the Atlantic port of Garmouth. The water in the area is said to have "the lowest level of dissolved minerals" of any area in Scotland, and that may affect the taste of its whiskies. Another report explains that "quartzite at the source keeps high levels of minerals from mixing with the water".

The region's whiskies have a fruity nature "ranging from ripe pears to sultanas" and some exhibit "sweet, caramel and fruity notes". The use of peat is not common here, so many of the whiskies are not "smoky"; typically, most Speyside whisky is fruity, sweet, and nutty, featuring notes of apple, honey, vanilla, and spice.

There’s no distillery – or even place – by the name of Ben Bracken. It’s just a concoction of Gaelic sounding words the marketing department at Lidl probably picked up from a dictionary bought in Scotland. Bracken, as it happens, is an English word for a fern commonly found across much of the Scottish landscape whilst Ben is from the Gaelic Beinn, for Mountain. There are numerous other expressions in the 20+ year range, from the Highlands, Speyside and Islay. One Highlander is aged at a Methusalahian 40 years!

BEN BRACKEN 28 YEARS OLD SPEYSIDE SINGLE MALT 40% ABV

NOSE: Fresh and expressive: honey, newly mown hay and the barn in which it will later be stored. Some pungent floral aromas of honeysuckle and jasmine, then wheaty notes with the unmistakable edge of age. With water, somebody’s been jumping around in the haybarn, sending seeds and dust flying. Water also conjures fruit, in the form of bright tangerine notes.

PALATE: The cereal notes come first, merging gently into animal feed and a farmyardy character. There’s a little curry spice to perk things up and, once you add water, more of that bright tangerine flavour and then the ripe tang of laced marmalade. Then honey and a little Madagascan vanilla.

FINISH: The heady hedgerow aromas round things off nicely.

This 28 YO was released in November 2015 as part of the Lidl Christmas offering. Typically, it’s from an undisclosed Speyside distillery and apart from the bottling strength of 40%, any other details are pretty scarce. One of the stars of the show for Lidl this year. There’s weight, there’s subtlety, there’s complexity and there’s outright pleasure. Simply beautiful. Dreams of a hayloft, late summer, languorous heat, with a bee buzzing past.

BEN BRACKEN 23 YEAR OLD SPEYSIDE SINGLE MALT WHISKY 40% ABV 

I wouldn’t normally spend £40 on a bottle of whisky, but the chance to buy a

23 year old whisky for a lot less than a 23 year old normally costs was too good a deal to miss. My local Lidl had a few bottles, so I purchased one, I had been impressed with one of their blends I had bought last year, and Lidl and Aldi have a reputation for good value for money spirits. The good news is, it’s nice. I’ll be honest, it’s not mind blowingly amazing, but I guess I expected too much. I think I got excited by it being a 23 year old whisky, at a bargain price, so I was expecting it to be leaps and bounds better than my normal whisky drinks, but instead, I should have been looking at it, as a £40 whisky, which is 23 years old.

It’s nicer than most of the other whiskies I’ve reviewed, but it costs a bit more than most of them, however it’s not as nice as the Yamazaki, or the 12year old Balvenie Triple Cask I tried a while ago, but it costs less than both of them. As is often the case in life, you get what you pay for, I paid £40 for a bottle of whisky, which is nicer than one that costs £25, but not as nice as one that costs £50 upwards, so I can’t really complain. So, now I’ve got that out the way, how does it taste? It’s smooth, slightly spicy, fruity, slightly woody, not much burn. There’s nothing overpowering or obvious, not sure if that’s a good or bad thing. In short, it’s a nice whisky, but unfortunately nothing stands out about it to make me want to buy it again, or recommend it. It ticks the right boxes, it smells and taste like whisky, but there’s nothing extra-special about this drink.

BEN BRACKEN 22 YEARS OLD ISLAY SINGLE MALT 40% ABV

NOSE: The peat is immediate and enveloping. It’s of the medicinal variety, suggesting sticking plaster, Germolene and camphor. Then there’s a slightly herbal, grassy character with the animal edge of a garden shed taken over by mice. Just a hint of light orange. Water pushes the smoke back, beckoning in toybox memories of Plasticine and Fuzzy-Felt, then forest undergrowth and a pinch of anise.

PALATE: There’s no escaping that smoke, but now it’s a charred, still smoking branch which catches at the back of your throat. There’s a pleasing savoury element too and some Garam Masala, and this savoury theme continues with water, before the smoke returns in lighter and more palatable form.

FINISH: On the short side and a little drying, but some fruit too.

Distilled in 1993, Product of Scotland. Ben Bracken distilled, matured and bottled in Scotland, Islay single malt scotch whisky. Chill Filtered and matured in oak casks for 22 years. Distilled in copper pot stills in the centuries-old manner, it is then laid down in oak casks and matured, undisturbed, for twenty-two years.This screams Islay almost too loudly, and subtlety is not its strong suit. But, once you grow accustomed to it, it’s very enjoyable – plus you can dial it down a bit with water. And did I mention the price…? Camping on a beach. You wake warmed by the morning sun, and the smoke from the dying embers of a fire drifts over, making you cough… and smile.

The senior citizens, the 40 YO, 27 YO and the 25 YO.