Distillers want free access tomarkets
THE Scotch Whisky Association (SWA) has urged the UK Government to support the industry by pressing for ambitious free trade deals with key growth markets such as India, China and Brazil, as the industry prepares for life outside the European Union (EU).
As the UK prepares to kick-start the process of putting Brexit into action, the SWA has urged Westminster to prioritise putting trade deals in place with the markets that offer distillers the biggest global growth potential.
Chief among those are India, where despite sustained efforts the EU has been unable to secure unfettered access to the market for Scotch whisky distillers.
David Williamson, director of public affairs at the SWA, said: “The focus here is largely on markets where we see long-term commercial potential for Scotch whisky, but where there are not existing EU agreements in place – India being the top priority over a number of years.
“The EU has been negotiating with India for a number of years for a free trade agreement. But over the last couple of years there has been no progress.
“As the situation evolves, and the UK starts to scope out where its priorities for new trade deals should be, there is an opportunity now take on these issues.”
India is one of the biggest “whisky” markets in the world, having imported 41 million bottles of Scotch in the first six months of the year – 41 per cent more than in the same period in 2015.
At present Scotch commands a one to two per cent share, but the SWA believes securing a trade deal with India involving tariff liberalisation could quickly boost that to five per cent.
Scotch currently faces a 150 per cent import tariff in India at federal level, while other fees and taxes are also applied in other states.
Away from India, the SWA highlighted the importance to whisky of the UK securing free trade deals with Brazil and the wider Mercosur region of Argentina, Paraguay, Uruguay and Venezuela. Scotch distillers continue to face a 20 per cent import tariff on exports to Brazil, where the geographical indication of Scotch is not protected.
Fast-growing emerging markets such as Angola, Kenya, Nigeria, Burma and Vietnam have also been singled out by the SWA as ripe for further exploitation with freer access, while further growth is believed to be possible in Australia and Thailand if free trade agreements are secured.
On the implications of Brexit, the SWA welcomed the certainty offered by the Government’s Great Repeal Bill. That effectively means the full gamut of EU legislation that affects distillers – ranging from bottle sizes and labelling to the definition of Scotch – will be transposed into UK law for a provisional period after Brexit.
The SWA reiterated its satisfaction that, under World Trade Organisation rules, no further tariffs will be applied on Scotch going into the EU further to the UK leaving the bloc.
And yesterday it called on the UK Government to ensure no further domestic tax or regulatory burdens are placed on the industry amid the uncertainty following the Brexit vote. On the prospect of a second vote on Scottish independence, a spokesman said: “We are taking one referendum at a time.”