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Scotch whisky sales drop as China frowns on lavish spending Scotch whisky sales drop as China frowns on lavish spending
(about 5 hours later)
Global sales of Scotch whisky suffered one of their worst falls in recent decades, slumping by 11% for the first half of the year and wiping £220m off overall sales. Global sales of scotch whisky have suffered one of their worst falls in recent decades, slumping by 11% for the first half of the year and wiping £220m off overall sales.
The Scotch Whisky Association (SWA) blamed new anti-extravagance drives in China, the stronger pound and an economic slowdown in some markets for the decline in Asia and the Americas, two of the industry’s fastest-growing regions.The Scotch Whisky Association (SWA) blamed new anti-extravagance drives in China, the stronger pound and an economic slowdown in some markets for the decline in Asia and the Americas, two of the industry’s fastest-growing regions.
The association said exports of blended and malt whisky fell from £1.99bn in the first six months of 2013 to £1.77bn for the same period this year – the largest half-yearly decline in 25 years. The association said exports of blended and malt whisky fell from £2bn in the first six months of 2013 to £1.77bn for the same period this year – the largest half-yearly decline in 25 years.
The figures present a significant headache for the SWA’s recently appointed chief executive, David Frost, who said the drop proved that the UK government had to continue bringing down trade barriers and restrictions.The figures present a significant headache for the SWA’s recently appointed chief executive, David Frost, who said the drop proved that the UK government had to continue bringing down trade barriers and restrictions.
The SWA is expected to ramp up pressure for a 2% cut in excise duty. Frost also said it would start consulting its members, dominated by global drinks giants such as Diageo, Pernod Ricard and Suntory/Jim Beam, over the tax and regulatory reforms that could follow greater devolution for Scotland. The association is expected to ramp up pressure for a 2% cut in excise duty. Frost also said it would start consulting its members, dominated by global drinks giants such as Diageo, Pernod Ricard and Suntory, over the tax and regulatory reforms that could follow greater devolution for Scotland.
“The latest figures also 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 said. “The latest figures also 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 said.
“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.” “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.”
The association said it would study the UK and Scottish government proposals for greater devolution after last week’s independence referendum, in which voters chose to remain in the UK by 55% to 45%.The association said it would study the UK and Scottish government proposals for greater devolution after last week’s independence referendum, in which voters chose to remain in the UK by 55% to 45%.
A spokewoman refused to speculate on the powers that could be handed over to the Scottish parliament. The ruling Scottish National party in the devolved government in Edinburgh has previously raised excise duty and has recently pushed hard to devolve corporation tax. A spokewoman refused to speculate on the powers that could be handed over to the Scottish parliament. The ruling Scottish National party in the devolved government in Edinburgh has previously raised the prospect of devolving excise duty and has recently pushed hard to devolve corporation tax.
The latest figures end a long period of booming sales and export records as whisky sales expanded rapidly in South America, particularly Brazil and Mexico, and south-east Asia. The latest figures end a long period of booming sales and export records as whisky sales expanded rapidly in South America, particularly Brazil, and south-east Asia.
Sales fell 16% in the US to £328m, 46% in Singapore to £94m, 19% in Brazil to £40m, 27% in Mexico to £39m and by 22% in Germany to £65m, marking a significant reversal in fortunes in those markets. The association said sales in China, where scotch is regarded among the newly rich as a symbol of significant affluence and status, had fallen 35%, down from £25m to £15m. While that puts China only 28th in the global rankings for whisky sales, the Chinese market is also supplied heavily via Singapore, which saw its whisky imports collapse by 46% from £174m to £94m.
The SWA said the first half of any year tended to be quieter than the second half, primarily because of market cycles and festivals such as Christmas that fall late in the year. The association’s spokeswoman confirmed, however, that this was the most significant half-year drop since 1999, when sales dropped 14%. Sales also fell 16% in the US to £328m, 46% in Singapore to £94m, 19% in Brazil to £40m, 27% in Mexico to £39m and by 22% in Germany to £65m, marking a significant reversal in fortunes in those markets.
The SWA said the first half of any year tended to be quieter than the second half, primarily because of market cycles and festivals such as Christmas that fall late in the year. The association’s spokeswoman confirmed, however, that this was the most significant half-year drop since 1999, when sales fell by 14%.
There have been other half-yearly declines, with modest falls in 2012 and 2009, but they were made up for by sales in the second half of those years.There have been other half-yearly declines, with modest falls in 2012 and 2009, but they were made up for by sales in the second half of those years.
The SWA added that sales increased in some important new and traditional markets: in Taiwan up by 39% to £91m, in Japan by 18% to £32.5m, in the UAE by 26% to £54m - because it acts as a distribution hub to other markets - in India by 31% to £36m and in France by 6% to £211m. France is the industry’s biggest market by volume.The SWA added that sales increased in some important new and traditional markets: in Taiwan up by 39% to £91m, in Japan by 18% to £32.5m, in the UAE by 26% to £54m - because it acts as a distribution hub to other markets - in India by 31% to £36m and in France by 6% to £211m. France is the industry’s biggest market by volume.
The association highlighted sales growth in the “difficult market” of India, where the UK government and the SWA have been in open conflict over counterfeiting and import barriers. India also has a popular indigenous whisky industry in competition with Scotch.The association highlighted sales growth in the “difficult market” of India, where the UK government and the SWA have been in open conflict over counterfeiting and import barriers. India also has a popular indigenous whisky industry in competition with Scotch.
Frost said: “We are confident that Scotch whisky will continue to grow in the long-term as markets stabilise and new ones, such as emerging economies across Africa, open up. However, it is clear that in the short-run that there are economic headwinds affecting exports.”Frost said: “We are confident that Scotch whisky will continue to grow in the long-term as markets stabilise and new ones, such as emerging economies across Africa, open up. However, it is clear that in the short-run that there are economic headwinds affecting exports.”