The contribution of the Scotch Whisky industry to the UK economy has grown by 10% since 2016 to £5.5bn.

A new report by the Scotch Whisky Association, building on research carried out by the Centre for Economic and Business Research (CEBR), also reveals Scotland’s national drink generates two-thirds of all spirits Gross Value Added (GVA) in the UK. The industry has been buoyed in recent years by record exports, reaching £4.7bn in 2018, and several new distilleries beginning production and opening their doors to tourists.  This success comes despite the industry continuing to pay the fourth highest duty rates in the EU, and one of the highest of spirit producing nations globally. Recent freezes to UK duty have helped the industry to reinforce its vital importance to the UK economy.  Karen Betts, Chief Executive of the SWA, said: “This research shows the Scotch Whisky industry’s huge contribution to both the Scottish and UK economies. Significantly, the research shows that our industry’s GVA increased by 10% to £5.5bn between 2016 and 2018, as a result of Scotch Whisky companies’ continued export success and the industry’s consistent investment at home – with over £500 million going into production, distribution, marketing and tourism in the last 5 years.  Despite the challenges of Brexit, this investment continues to flow, with further projects planned and more distilleries set to open – a sign that the Scotch Whisky industry remains confident about the future.  This is great news for our many employees, our investors, our supply chain and, of course, for consumers all over the world who love Scotch.  This report also highlights the high rate of domestic tax that Scotch Whisky faces in the UK. In the US, Scotch and other whiskies are taxed at just 27% of the rate that HM Treasury taxes us here at home. We will continue to press the Chancellor for fairer treatment for Scotch Whisky in our domestic market, which reflects the vital economic contribution the industry makes to the UK economy every day.”

Paul whisky-sales

Scotch Whisky provides £3.8bn in direct in GVA to Scotland – helped by regulations in place that requires all Scotch Whisky to be distilled and matured for at least three years in Scotland. This means Scotch Whisky contributes more than double than life sciences (£1.5bn) to the Scottish economy, supporting more than 42,000 jobs across the UK, including 10,500 people directly in Scotland – including MCLEANSCOTLAND Liz & Paul and our drivers, no to mention hotels etc and vehicle hire, calmac and everything else, and 7,000 in rural communities.  The sector was found to perform a crucial role in driving productivity across Scotland. The manufacturer of beverages in Scotland – dominated by Scotch – produces £210,505 GVA per employee. Comparatively, the industry is more productive than the energy sector (including renewables) at £173,511 per head, life sciences at £93,735 per head, and creative industries at £60,712 per head.  A summary of the report’s findings: The Scotch Whisky industry was estimated to provide £5.5 billion in gross value added (GVA) to the UK economy, up from £5bn in 2016. The direct impact of Scotch Whisky in the economy is estimated to be £3.8billion with additional indirect and induced effects of a further £1.7 billion. For every £100 of added value the industry produces, another £45 is generated in the broader economy. Scotch Whisky contributed 21% to the value of all UK food and drink exports and 1.3% of the value of all UK goods exported in 2018. For every £1 billion worth of goods exported from the UK, £13 million is Scotch Whisky. Without Scotch Whisky, the UK’s balance of trade deficit would have been £145.7 billion, more than its current level. In 2018, UK spirits excise duty receipts  (saxon tax) accounted for £3.8 billion, over 31% of all alcohol revenues – a proportion which has steadily increased in recent years having overtaken beer receipts in 2016. In the last five years, excise (tax) receipts increased to HM Treasury (HMT) by 23% or by £735m during a period where the net increase to the excise rate was only 52p per litre of pure alcohol (LPA).

We are doing our share, taking guests on whisky tours every month.


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