Back UK Spirits Exports to Back Global Britain
Tradition and innovation – Dalmunach distillery opened 2015
Britain can fulfil its trade potential by supporting industries which are competitive on the world stage.
The UK spirits sector is a great example of how backing industry helps back a global Britain. The UK is the world’s largest exporter of spirits. Sales are recovering post Covid and UK exports, including Scotch, are already reaping the benefits of the UK’s independent trade policy. For example, the Australia deal will level the playing field with US bourbon in the world’s 8th largest whisky market. A trade deal with India is a chance to reduce 150% whisky tariffs. That could more than double Scotch exports, while helping Indian whisky producers who use imported Scotch as a key ingredient.
The challenge now is to raise our trade ambitions even higher. I suggest three priorities:
Plan for the next generation of trade deals
UK trade negotiators are moving eastwards at an extraordinary rate, seeking FTAs with Australia, then New Zealand, then CPTPP and the Gulf. Next steps should be to lay the groundwork for future trade deals in Southern markets. Markets like Brazil and Nigeria may not be ready for deals now, but sales are growing fast (industry sales to Brazil were up 80.5% by volume for the first half of this financial year.)
Lead in tackling non-tariff trade barriers
Non-tariff barriers are issues such as paperwork and trading rules which favour local producers or restrict e-commerce. Research Chivas Brothers commissioned from EY shows how export gains in Nigeria could be nearly double if, in addition to cutting 20% tariffs, non -tariff barriers were cut by half. Small changes in regulation can make a big difference – like the 2020 US decision to allow 700ml bottles for spirits – a gift to SMEs who don’t have the budgets for multiple production lines.
Look beyond FTAs
The UK won’t have the capacity to sign a trade deal with every country in the near future. For a company like Chivas Brothers, which exports Scotch whisky to over 160 countries, it’s good news that the UK’s Department of International Trade is stepping up its work tackling market access barriers outside of trade deals. The approach they are piloting in Asia-Pacific should be a model for other parts of the globe.
This global trade agenda will create value in regions across the UK. It will unleash the export potential of SMEs who don’t have the resource to tackle trade barriers alone. It will create quality jobs for exporters and their suppliers. Spirits exports support jobs in agriculture, the glass industry and logistics and create a range of work from traditional crafts like cooperage to digital marketing.
Business supports ambition in trade. We can bring to government the market intelligence it needs in private and make the case for trade in public – we know that trade needs public and parliamentary support. Most important, we’ll continue to do what we do best: blend tradition and innovation to make world beating products which boost the UK trade balance and promote brand Britain.
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