Scotch whisky 'contributes £5bn to UK economy'

image copyrightSWA

Scotch whisky contributes nearly £5bn a year to the UK economy, according to research commissioned by the industry.

The Scotch Whisky Association (SWA) said more than 40,000 jobs were supported by the industry across the UK, including 7,000 in rural areas.

The research also found that Scotch made a positive contribution to the UK's balance of trade of almost £3.7bn.

Exports were estimated to worth about £4bn while imports, such as packaging and casks, totalled only £200m.

The study also suggested that the UK's trade deficit in goods of £115bn would be 3% larger without Scotch's contribution.

'Significant contributor'

SWA said the research reinforced Scotch whisky's position as a "strategically important" industry for the UK.

In a statement, SWA said: "Scotch is a significant contributor to rural employment, supporting often fragile local economies.

"The Scotch whisky industry is expanding at historic levels.

"As well as the 14 new distilleries opened since 2013, existing sites have been expanded, for example with increased production, more warehouses or revamped visitor centres.

"Up to a further 40 new distilleries are planned across Scotland, with seven expected to open this year alone."

The industry body also reiterated its call for the UK government to cut excise by 2% in March's Budget, arguing that the current tax of 77% on an average priced bottle of Scotch was "a burden on consumers and the industry".

In response, a UK Treasury spokesman said: "Scotch Whisky is a great British success story with exports worth £4bn a year. That's why we froze the duty on whisky and other spirits at last year's Budget."

Analysis by Douglas Fraser, BBC Scotland business/economy editor

image copyrightSWA

We're all learning more about trade, amid the heated debate over Brexit. The Scotch Whisky Association brings its own perspective, with an interesting analysis of net trade.

That measures the value of exports versus the value of imported raw materials and components. Britain has its own oil and gas supply, but while it exported £10bn worth in refined oil during 2015, and as much in crude, it imports £29bn worth. So it's a net importer.

In the economic analysis by the distillers' trade grouping, it shows there's a slight negative on iron and steel, and on 'toilet and cleansing preparations'. Much moreso on plastics and paper products.

Britain exports a lot of cars, with nearly £26bn by value in 2015. But more than half of a British-built car is made of imported components. And other finished cars are imported, with a total automotive value of nearly £32bn.

The biggest single sector deficit is clothing. We import £12bn per year more apparel than we export - an imbalance of £6bn in exports to £18bn in imports.

What do distillers need to import? Fuel, packaging, some grain and used casks - those bourbon barrels and sherry butts that add a lot of Scotch's distinctive taste and colour.

Export value was around £4bn in 2015, while imports towards the product were around £200m.

What better reason, argues the Scotch Whisky Association on Robert Burns' birthday, for the chancellor to raise a dram to the Bard - a one-time excise officer in Dumfries - and cut duty on spirits?

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