In 2022, the Scotch Whisky industry demonstrated its robust contribution to the UK economy, reaching an impressive £7.1 billion, according to a report released by the Scotch Whisky Association (SWA).
The findings not only underscore the industry's economic significance to the UK but also shed light on its role in supporting jobs, driving productivity, and facing challenges that require government support for sustained growth. If quickly follows news from the British government on the flourishing UK drinks market in the Asia-Pacific region.
The SWA report reveals that the Scotch Whisky industry supports a staggering 66,000 jobs across the UK, with 41,000 of these located in Scotland.
Remarkably, the sector is responsible for generating £3 out of every £100 of Scotland's total Gross Value Added (GVA), making it the second most productive sector in the country, closely trailing the energy sector, including renewables. From the last Economic Impact report in 2018, this is a 29% increase in GVA, since the report in 2016 it is a 42% increase.
Challenges and Resilience
Despite facing domestic and international challenges, Scotch whisky companies have maintained a commitment to growth, employment, and productivity. However, the industry warns of impending risks, including the highest spirits duty rate in the G7, infrastructure needs in Scotland, and pending trade deals – particularly with India. The report emphasises that government support is essential to overcoming these challenges and ensuring the continued success of the Scotch Whisky industry.
Mark Kent, Chief Executive of the SWA, stresses the importance of government backing, stating, “The past five years have been turbulent for our sector, as we faced retaliatory tariffs in the United States, in addition to the global pandemic and the knock-on economic pressures. The Scotch whisky industry has remained resilient, with capital investment directed towards fulfilling our collective sustainability ambitions, creating world-class visitor attractions, and building more distilleries that will help boost jobs and growth.
“Ahead of the UK Spring Budget on 6 March and this year’s General Election, it is vital that the industry is supported by government so that businesses can continue to invest in the UK economy.”
A significant portion of the industry's economic impact is concentrated in Scotland, where 75% of the total GVA, amounting to £5.3 billion annually, is generated. Legislative requirements, such as the maturation and bottling of Scotch whisky in Scotland, contribute to this regional concentration.
The report highlighted seven regions of Scotland and their impact on the Scottish economy (in order of impact):
- Highlands and Islands: £799 million
- Glasgow: £627 million
- Mid Scotland and Fife: £507 million
- Central Scotland: £442 million
- West Scotland: £379 million
- Lothian: £244 million
- South Scotland: £160 million
- North East Scotland: £77 million
Read More: The State of Scotch: Globale Exportzahlen für 2023 von 5,6 Milliarden Pfund aus Schottland
The report underscores the industry's crucial role in driving productivity in Scotland. The manufacturing of beverages, dominated by Scotch, produces £273,000 GVA per employee. This places the industry second only to the energy sector in terms of GVA per head.
Government Support and Industry Response
Government officials, including Scottish Secretary Alister Jack and Wellbeing Economy Secretary Neil Gray, express support for the Scotch Whisky industry, acknowledging its vital role in the economy. The industry's continuous growth in global markets is seen as an opportunity for increased jobs, investment, and international recognition.
Neil Gray has this to say: “The Scotch whisky industry is extremely valuable to the Scottish economy in terms of production and exports and increasingly also for tourism and hospitality. It supports thousands of jobs – including in rural areas – and is a success story at home and internationally.
“Scotch whisky is a world-renowned brand and our leading single food and drink export product. Continued growth in global markets means more jobs and investment across Scotland, our communities benefit and it entices visitors and residents to experience the incredible offer we have here in Scotland.
“The Scottish Government will continue to work with the whisky sector to drive further growth and success.”
Scotch Experiencing Growth
Since 2018, the Scotch whisky industry has seen over £2 billion invested. From new distilleries to maturation warehouses, and visitor centres to low-carbon technologies, the industry invests hundreds of millions annually in Scotland and across the supply chain.
When it comes to collecting Scotch whisky, the variety of the spirit is a huge draw, however, it is a growth industry and purchasing whisky as an investment has become a large part of its appeal.
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