Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

No-deal Brexit would threaten Scotch whisky export growth, say producers

Published 22/01/2019, 19:06
Updated 22/01/2019, 19:06
© Reuters. Glasses of scotch whisky sit on a table during a tour of the Glenfiddich scotch whisky distillery in Dufftown, Scotland

© Reuters. Glasses of scotch whisky sit on a table during a tour of the Glenfiddich scotch whisky distillery in Dufftown, Scotland

EDINBURGH (Reuters) - Leaving the EU in March without a deal would pose risks to Scotch whisky’s current healthy rates of export growth, the Scotch Whisky Association said on Tuesday.

It told Reuters it was also concerned about significant increased labelling costs of a no-deal Brexit to Britain's biggest food and drink export.

It said no-deal would add cost and complexity to UK/EU trade and would mean the loss of trade benefits worth 50 million pounds annually in tariffs.

"Moreover, we have real concerns about the ability of port operators to cope with significant, last-minute changes to export systems, and the risk of disruption at ports is high," the group said in a statement.

An SWA spokeswoman said one of the biggest concerns was to do with labelling requirements. If a no-deal scenario takes effect from end March, EU-bound product labels would need to display either an EU address of the producer or the address of the relevant importer into the EU market.

Currently many Scotch Whisky companies list a Scottish address to comply with this requirement. However, from late March this may no longer be possible, since an EU address is likely to be required because of EU labelling laws.

A no-deal Brexit could necessitate at least two different label templates from March: one for products sold in the UK; and at least one – in some cases many more than one – for products destined for the EU, the spokeswoman said.

"This would significantly increase costs with companies forced to use shorter bottling runs and manage additional stock keeping units (SKUs) in their inventories," she added.

Scotch is dominated by multinationals like Diageo (LON:DGE.L) and Pernod Ricard (PA:PERP.PA) and has been an export sector for centuries.

© Reuters. Glasses of scotch whisky sit on a table during a tour of the Glenfiddich scotch whisky distillery in Dufftown, Scotland

Whisky exports were worth 4.5 billion pounds to Britain in 2017, its biggest food and drink export ahead of salmon, chocolate and cheese.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.