23 Apr
2004

It's whisky galore all over the world

WHISKY has been the national drink of Scotland for as long as anyone can remember, sober or otherwise. But now it seems the wee Scottish dram has become the world’s tipple of choice, outselling other countries’ national drinks abroad by, presumably in some cases literally, staggering levels.

In France, for example, more Scotch whisky is sold to drinkers in a month than the amount of Cognac sold in an entire year, according to the most recent figures, and the Spanish too are happy to forsake sangria for Scots’ spirit.

The Greeks are also shunning their national drink of ouzo, the downfall of many holidaymakers, in favour of a nip or two, with more than a million more cases of Scotch whisky sold in Greece than those of the aniseed alcohol. Further afield, Taiwan, South Korea, Venezuela and Japan are all now in the top ten export markets for Scotch whisky, while as western Europe becomes more aware of the damaging health effects of alcohol, some of the biggest gains in the whisky market have been seen in some of the world’s poorer nations. Tipplers in China, India, Poland, Hungary and the Czech Republic are all becoming partial to a taste of the water of life.

In fact, every second last year 30 bottles of Scotch whisky were sold overseas, generating £2.37 billion for the UK economy - the second highest export figures ever by the Scotch whisky industry. Which is all good news for Lothian, boasting as it does the headquarters of Glenmorangie in Broxburn, West Lothian and the Glenkinchie distillery in Pencaitland, East Lothian, owned by United Distillers.

Indeed it all brings a new meaning to the phrase "whisky galore", and the industry is understandably toasting its own success.

So how has the wee dram grown so big? And will it continue to be the world’s favourite tipple as more and more countries crack down on alcohol consumption in the same way they have on cigarette smoking? Could the future for Scotch actually be in the poorer, far-flung corners of the world rather than the increasingly health conscious glens of home?

David Williamson, of the Scotch Whisky Association, which released the impressive export figures this week, says one of the main factors of whisky’s success has been the breakdown of international trade barriers because of changes in the political landscape and effective lobbying of politicians.

He says: "There are new emerging markets around the world. In Eastern Europe, for example, where the EU entry date of May 1 is approaching [when the countries join the European Union], Poland, the Czech Republic and Hungary are all showing growth because after May 1 there will be an enlarged single market which creates a level playing field [by getting rid of tariffs on Scotch exports].

"China also certainly seems poised for future growth with its entry into the World Trade Organisation which has led to reduced tariffs. And around the world we are also working to gradually remove trade barriers facing Scotch to create future opportunities for market growth, which bodes well for the health of the industry."

He adds: "The industry spends a lot of time working with the UK Government and with governments around the world to ensure that Scotch can be fairly traded, removing barriers like unreasonably high tariffs and onerous labelling requirements."

Pressure from the Scotch whisky industry has seen WTO taxes removed in Chile, South Korea and Japan and Williamson says the body is pushing hard to get rid of tariffs in India. Distillers in Scotland have also been quick to target the growing world market which is opening up before them.

Glenmorangie in Broxburn, which produces Glenmorangie Single Malt, the UK’s bestselling malt whisky, now makes around 60 per cent of its sales abroad, generating around £35 million a year. Sales and marketing director Simon Erlanger says: "Our key markets, apart from the UK, are France, the US, Germany and Italy. But there are also small, but growing, markets in the Far East in countries like Taiwan, Korea and China."

He believes the popularity of whisky relates to its historical and romantic association with Scotland. "It is a contemporary drink in most markets but it has a fantastic heritage. A lot of the fascination with Scotch whisky is about the romantic view people have of Scotland."

He also credits the SWA with doing a "tremendous job" in helping to remove trade barriers, and says that Glenmorangie has muscled in on the world market by teaming up with drinks giants Bacardi and Brown-Forman, which owns Jack Daniels.

"They are our two key partners. They don’t have single malts to compete with ours so they market our Glenmorangie brand in their infrastructure. We also have our own team of sales and marketing people who work with them promoting our Scotch whisky."

But while glasses are being raised at distilleries across Scotland, alcohol misuse experts warn that the industry’s success could eventually prove to be the downfall of countless people around the world.

For while alcohol consumption in Scotland and other industrialised nations falls to safer levels as the healthy living message of drinking in moderation starts to get through, experts say the emerging markets in the developing world will become even more important to the Scotch whisky trade. This could mean that the healthy living message in Scotland ends up having the opposite effect overseas.

Alcohol expert Professor Martin Plant says it is a potential risk. And he points to the tobacco industry which has already targeted poorer countries as the healthy living message about smoking has shrunk the market in the west.

Plant, former director of the Alcohol & Health Research Centre in Edinburgh and now professor of Addiction Studies in Bristol, says: "The Scotch whisky industry has, I think, a fairly good record on demonstrating social responsibility, but in countries like Thailand or India which are being targeted, they don’t have the health message that people have in industrialised countries like Scotland.

"Tobacco products now are increasingly rejected by people in the West who have got the health message that smoking kills. And the industry is now dumping high tar products in Third World countries that don’t have the same controls. The same could happen with any product so this [the growing market in whisky exports] could lead to problems.

"The World Health Organisation is very concerned about the whole relationship between western industry [such as the drinks trade] and the possible implications for countries that may not be used to the products and their side-effects and may not have controls to deal with them."

Unsurprisingly, the industry disagrees with the more alarming view of the growing popularity of the water of life, although the damaging effect of the healthy living message on the whisky trade has already been acknowledged by the SWA. Williamson says: "The market for Scotch in France remains very high, it is the biggest market by volume. But we did see a fall in the volume last year from its historically high level.

"We think this is probably indicative of a fall in the volume across all alcohol drinks last year, perhaps partly as a result of the French government’s health drive which focused, among other things, on alcohol."

The UK market too showed a slight drop in sales last year, according to the SWA figures, although Williamson does not fear that the healthy living message will damage trade in the UK.

"The UK market has shown stability in recent years and remains vitally important to this industry," he said.

"Last year over 130 million bottles of Scotch whisky were sold in the UK. There was a slight fall of one per cent but Scotch whisky remains the leading spirit in the UK accounting for over a third of all spirit sales."

And he says that the whisky trade is committed to "social responsibility" at home and abroad. "Our message is that Scotch should be enjoyed responsibly. In the UK most people drink responsibly as part of a healthy lifestyle. We support the Government’s sensible drinking message in the UK which stresses that moderate consumption of alcohol can have health benefits, but of course if consumed irresponsibly alcohol may cause problems for an individual. We take our social responsibility seriously in whatever country."

Erlanger backs this view, and claims that there is "no connection" between what is happening in the tobacco trade and what is happening in the drinks industry.

He says: "I think generally we are a very responsible industry and we work very closely with governments to promote sensible drinking."

The whisky industry would no doubt raise a glass to that.

Article Courtesy of The Scotsman

scotsman.com