Rosemary Gallagher, head of communications at Scottish Whiskey Association (SWA), has confirmed that the continued growth within the whiskey market will depend on how successfully the UK leave the European Union (EU).
"The success of the Scotch whiskey industry should not be taken for granted during a time of such change as Brexit. As a major manufacturer and exporter, the continued growth of Scotch will be a litmus test of the success of the UK's exit from the EU," Ms. Gallagher told Sputnik.
After the Brexit vote, there is both uncertainty & opportunity. Domestic tax competitiveness has never been more important #FairTaxForWhisky pic.twitter.com/4vCZYJQC5W
— Scotch Whisky Assoc. (@ScotchWhiskySWA) February 19, 2017
This is not the first time the Scotch Whiskey Association (SWA) have communicated their concerns. They announced the loss of the EU Free Trade Agreements (FTAs) as one of the biggest challenges facing producers, with more than 90 percent of Scotch being sold outside the UK.
Some experts believe that Scotland will suffer the most as a result of Brexit, warning of troubled times for businesses. Despite the fact that whiskey will not face tariffs on exports in Europe, there may be fees attributed to other countries such as Columbia, Peru and South Africa and they could rise to 20 percent if transitional agreements are not put in place.
David Frost, ex-CEO of SWA, said that whiskey will not face a tariff on exports to Europe and the zero tariff policy will continue with countries like the US, Mexico and Canada.
.@Mark4WyreForest visited Mitsubishi & @TheBenRiach, met with @ScotchWhiskySWA & discussed UK gov support for Scottish #exports @ #SCDIforum pic.twitter.com/dnHSc1lUNk
— Dept. for Int. Trade (@tradegovuk) 17 March 2017
Ms. Gallagher has echoed Frost's, stating that although there will be minimal changes, there will however be significant challenges to trade.
"Some aspects of doing business won't change for Scotch post-Brexit. Under World Trade Organisation rules, Scotch will continue to benefit from a zero tariff on exports to the EU. In many other markets Scotch will also continue to see existing zero tariffs, for example in the US, Canada, and Mexico, as these are offered to all countries already. There are, however, many areas where Brexit could have a big impact on Scotch whiskey trade and we're working with government to address those potential challenges," Ms. Gallagher told Sputnik.
Ms. Gallagher confirmed that the UK government must ensure there is an "open trade policy."
"That's why we want the UK Government to pursue as open a trade policy as possible; secure continued robust protection of Scotch; transpose relevant EU single market legislation into UK law; find opportunities where a distinct UK approach could benefit domestic industry and ensure a domestic tax and regulatory agenda that delivers a platform for international growth," Ms. Gallagher added.
2/4 What will change for #Scotch after #Brexit — loss of FTAs covering 10-15% of our markets. @ScotchWhiskySWA pic.twitter.com/S2pUA5ABRj
— David Frost (@DavidGHFrost) 3 August 2016
Similar sentiments where echoed by Mr. Frost, who called on British embassies around the world to do more to help to knock over barriers that stop fair access for Scotch whiskey and to try and get them in many more markets around the world.
"Scotch whiskey is one of the UK's most successful exports. We are calling on the UK Government to bring clarity to the transition to Brexit as soon as possible, and to negotiate to ensure that the current open trading environment is not affected," Frost said.
The SWA has called on the government to find practical solutions to solve the problem faced by whiskey suppliers across Scotland.
