The Scottish National Party (SNP) has recently claimed that trade complications created by Brexit cost the Scottish whiskey industry £ 5 million ($ 6.9 million) a week.
SNP used sales figures by comparing sales from January-May 2021 to the same period in 2019, revealing that levels were lower by £ 105.7 million ($ 146.5 million). The credit for the argument is that EU sales figures after the end of the Brexit transition period, from January to March 2021, fell by 135.9 million pounds ($ 188.5 million) compared to the same period in 2019.
The British government, led by the Conservative party for Brexit, has called the allegations misleading and says it is difficult to draw conclusions in the wake of the effects of the Covid pandemic and rising levels compared to 2020.
Going the line between these two views is the Scotch Whiskey Association (SWA), which represents the interests of the industry across trade and politics. In an official statement, it pointed to rising levels since a nadir in 2020, while making it clear that trade in the EU has become more complicated thanks to the changes in trade created by Brexit:
“The way Scotch Whiskey is ed to the EU has changed since Brexit, and producers have had to adapt to changes in customs systems, labeling and paperwork, as well as the withdrawal of some transport services.
“ levels fluctuate month by month, and this has been affected over the last eighteen months by both the Covid-19 pandemic and the UK’s exit from the EU.
“Although it was undoubtedly a tough start to the year for companies, the decline in s in the first quarter is partly explained by increased s in December 2020.
“Now that infection control measures in many of our global markets are easing, the pace of industry recovery is encouraging.”
The cost of doing business is certainly higher for Scottish whiskey companies due to Brexit and to some extent favors larger companies that can absorb the costs while smaller producers can lose. For example, the price of materials coming from the EU used in Scotch whiskey has risen. SNP Shadow Secretary of State for International Trade Drew Hendry claimed in June that the price of cardboard and glass used by industry is up 12% and 7% respectively.
Many UK retailers also did not ship to the EU after the end of the transition period. The world’s largest online whiskey retailer, The Whiskey Exchange, has recently started shipping to the EU again after months of not being able to do so, while another major online seller, Master of Malt, is still not delivering to the EU.
Despite Downing Street protests, Brexit has also complicated the process despite the EU-UK free trade agreement. On its website covering Brexit, the SWA makes it clear that there have been delays and disruptions in shipments, that s to the EU are now more expensive and more complicated, and that shipments to Northern Ireland are still problematic.
Although Brexit has clearly not helped the Scottish whiskey industry so far, the picture is still brighter than 2020, when US tariffs and economic uncertainties from the Covid pandemic also hit overall sales hard. However, as the EU is one of the key markets for the Scottish whiskey industry, Brexit uncertainties are unlikely to disappear any time soon.