Scotch makers get hiccups as sales, exports dip

Scotch whisky exports fell last year for the first time in a decade, declining by 7 per cent to £3.9 billion, adding to the industry's difficulties with domestic sales also declining during 2014.

The Scotch Whisky Association (SWA) blamed weaker economic conditions in some markets and political volatility in others for the decline, with the volume of whisky sales overseas also falling by 3 per cent to 1.2 billion standard bottles.

The difficult year ends a decade of continuing sales increases and record-breaking growth. The total value of all whisky exports has increased by 74 per cent since 2004, and premium single malt sales grew particularly strongly by 159 per cent over the decade.

That growth in single malt sales is based on marketing whisky to newly enriched middle-class consumers in emerging markets, but political volatility in Russia and Ukraine hit sales hard. Russia dropped out of the SWA's top 20 markets, with the value of direct sales there down 95 per cent from £25 million to £2 million in a single year.

The global slump also mirrors a 5-per cent fall in UK sales volumes last year, down to 83 million bottles and the steepest annual fall for several years. That prompted the SWA to increase its campaign for a reduction in UK whisky duty, which was accepted by the chancellor, George Osborne, with a 2 per cent cut.

The SWA said the largest dip in overseas sales last year came in the US, the industry's largest market, where sales fell 9 per cent to £748 million.

The SWA believes Osborne's duty cut will influence other governments to slash import tariffs and help boost sales. It is backing free trade agreements, including an EU deal with Vietnam, and further agreements with Canada, Colombia and Peru.

David Frost, the association's chief executive, said, ''Economic and political factors in some important markets held back exports in 2014 after a decade of strong growth. It shows that the industry's success cannot be taken for granted and that we must continue to argue for more open markets and ambitious trade deals that tackle barriers to market access.''