As an industry, Scotch single malt production is older than income tax. For decades, the market for Scotch was a domestic one- with the UK having a lesser population and fewer still that could afford to drink it. As such, there was plenty to go around. This is no longer the case.
Scotch single malt today is a global spirit and part of the very fabric of society worldwide. Statistics show that whisky now outsells Tequila in Mexico and Cognac in France. Whilst the industry has increased production levels by as much as 60% over the past decade, just 800million (approx.) litres of whisky are produced annually in Scotland, and just 40m litres (approx.) retained as single malt. This level might be considered small when viewed against the backdrop of 500m generic whisky/whiskey consumers worldwide. The consequence is a hugely oversubscribed market for Scotch single malt with a perfectly inverse supply/demand imbalance.
2019’s Scotch whisky export value demonstrated clearly that demand is continuing to increase- export levels had increased by 4.4% (£208m) on 2018’s levels, setting a new record. Indeed, the theme continued as bottle exports reached 1.31bn, up 2.4% compared with 2018. Today, Scotch Whisky accounts for over 20% of all UK food and drink exports and is sold in around 180 markets worldwide.
Whilst the USA is still the largest export destination by value for Scotch Whisky at £1,069m, it is India that is now coming to prominence. Although Custom Duty on whisky imported into India is 150%, it is now the second largest export destination for Scotch Whisky by volume with 131m bottles, up 16.1% on 2018. The ISWAI (International Spirits and Wine Association of India) expects the government to reduce the customs duty to a reasonable level, in turning opening India to yet greater volumes of Scotch Whisky.
With demand for Scotch single malt higher than ever and supply levels approaching their zenith, it’s clear to us that prices are heading in the right direction.