The potential for global expansion in the whisky sector

On 13^th October 2022, Trade Secretary Kemi Badenoch announced the removal of trade barriers that previously deterred UK companies selling alcohol to countries across South America and Africa.

In effect, this has unlocked over £100million worth of opportunities in markets with doors being opened for UK alcohol companies to trade more products with less barriers.  

Trade Secretary Kemi Badenoch said: “Every week we remove a trade barrier somewhere around the world. From whisky in Argentina to gin in Angola, we’re slashing red tape and opening access to new markets and new customers.

“With these trade obstacles gone and more to follow, my message to UK businesses is clear – make the most of the huge global appetite for your fantastic products and sell to the world.”

The Trade Secretary made the announcement whilst visiting Glenkinchie Distillery which is based near Edinburgh. Its Victorian distilleries have recently been improved following £185 million investment by leading company Diageo for Scotch Whisky tourism. The Glenkinchie Distillery is home to the one of its biggest selling Scotch Whiskyt brands worldwide – Johnnie Walker.

After the Government intervened, tariffs on whisky from Argentina were reduced from 35% to 20%. Morocco removed 49% customs that had been mistakenly imposed upon a range of UK spirits. Planned tax increases for alcohol imports in Angola were cancelled allowing British companies greater access under agreements with Tunisia.

A free trade agreement that could lower tariffs and simplify customs to help distilleries sell to India is also being worked on. It’s worth noting that the UK exported £146 million of whisky to India last year from distilleries such as Glenkinchie but dealt with high tariffs of up to 150%.

Mark Kent, CEO of Scotch Whisky Association added: “Securing a deal with India to reduce the 150% tariff on Scotch Whisky is the industry’s top international trade priority.

“We want to see a deal agreed, but not any deal. To deliver for the industry, any agreement must open up the market to more Scotch Whisky producers, which will in turn generate hundreds of new jobs across the UK, hundreds of millions of pounds of additional exports, and boost investment and revenue in India.

“The ongoing negotiations are a once in a generation chance to give more Scottish distillers the opportunity to do business in India. That is the scale of the prize on offer.

“We look forward to working with the Trade Secretary to deliver continued growth for the Scotch Whisky industry in India, and other key global markets.”

The UK is also working towards an agreement with the Comprehensive and Progressive Trans-Pacific Partnership.

You can read more about the government announcement via www.gov.uk.