‘Lost decade of growth’ as tariffs and COVID hit Scotch Whisky exports

Global exports of Scotch Whisky fell by more than £1.1bn during 2020, according to figures released 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 compared to 2019. Exports to the EU 27, the industry’s largest regional export market, fell by 15%. 

U.S. tariffs decimate Single Malt exports

But it is the continued impact of tariffs on exports of Single Malt Scotch Whisky to the United States that has caused the most significant losses. The U.S. 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 U.S. fell by 32% to £729m, a loss of £340m compared to 2019, and accounting for around one third of total global export losses.  

Export losses to the U.S. 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 U.S. governments over subsidies granted to Airbus and Boeing. 

“These figures are a grim reminder of the challenges faced by distillers over the past year, as exports stalled in the face of the coronavirus pandemic and U.S. 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,” says Karen Betts, Chief Executive of the Scotch Whisky Association.

“In these challenging times, what’s so disappointing is the damage being caused by US tariffs. The U.S. has been, for decades, our strongest and most valuable market, but Scotch Whisky is now losing considerable ground there.”