The Scotch whisky industry faced significant changes in 2024, marked by a decline in export value even as volumes grew. Data released by the Scotch Whisky Association (SWA) indicates the value of Scotch whisky exports fell by 3.7% to £5.4 billion (US$6.7 billion), reflecting what industry leaders term as a 'challenging trading environment.' Despite the drop in value, exports by volume saw an increase of 3.9%, signaling changing consumer preferences.
Mark Kent, the chief executive of the SWA, emphasized the contrasting trends, stating, "Despite the resilience of the Scotch whisky industry, 2024 has been a challenging year." He noted the strain on distillers, as they have faced rising costs amid ever-increasing taxation on their products, with taxes on Scotch rising by 14% over the past 18 months. This cumulative effect of inflated input costs—covering cereals, energy, and shipping—has pushed prices onto consumers who are tightening their belts.
Perhaps the most notable shift explored by the SWA is the changing dynamics of global markets. India reclaimed its position as the top export market for Scotch whisky, having imported 192 million bottles. Meanwhile, the United States retained its status as the most lucrative single-market export, with Scotch whisky exports valued at £971 million (US$1.2 billion) in 2024. This indicates the substantial contribution of the industry to both UK exports and the US economy.
Looking regionally, the Asia Pacific area emerged as the most valuable export region, totaling £1.57 billion (US$1.96 billion) for the year. While this was down by 12.4% compared to 2023, it still reflects impressive growth of 26.9% since 2019. Kent remarked, "Overseas, the tectonic plates of trade are shifting, and exports to traditionally strong markets in the EU and North America have become much more challenging."
Highlighting the importance of government support, Kent urged the UK government to promote favorable trade relations with key markets such as India and to advocate for negotiations on free-trade agreements (FTA) with these nations. He underlined the integral role Scotch whisky plays in the local supply chain and the broader UK economy, asserting, "The Scotch whisky industry is a proven driver of economic growth, jobs and investment, and needs an environment free from the shackles of excessive taxation, regulation, and uncertain operating costs."
Kent's comments reflect the industry's urgent need for backing, especially as the global trade environment shifts and consumer tastes evolve. With the whisky market proving resilient against the backdrop of these challenges, the call for actionable government support grows stronger.
Overall, the Scotch whisky sector not only reveals trends about consumer preferences but also highlights the significance of political and economic factors affecting industries reliant on exports. The trends from 2024 could lead to lasting changes as the industry adapts to navigate these challenges and continues to evolve.