Whisky by Time News Round Up – April 2023

06/04/2023

‘Investors are turning to Scotch whisky as a means of not only growing but also protecting wealth in these times of high inflation and market instability.’ Herald Scotland 3/4/2023

We ended the financial year celebrating World Whisky Day on the 27 March and we start the new financial year with a buzz in the business pages. Whisky Cask Investment continues to attract positive media coverage.

Relevant news items reported on; strong performance in times of market instability, record export value, increased industry investment and the potential of a buoyant Asian market. Other interesting sector trends saw a growing number of millennials, Generation Z and women investors.

Here’s a round-up of recent news highlights.

“Scottish whisky casks performing better than gold”

On the 3 April The Herald and Dram Scotland reported on the BC20 Whisky Cask Index and how whisky casks are outperforming other asset classes such as gold.

Niall Brown, chief executive officer of Braeburn Whiskey commented:

“While gold dropped and markets generally finished around the same mark as the year before, the value of the BC20 index rose by double digits. It shows more investors are turning to Scotch whisky as a means of not only growing but also protecting wealth in in these times of high inflation and market instability.”

Scotch whisky is providing a really effective way for investors to diversify their portfolios towards safer ground, hedging against the inflation and uncertainty that are currently affecting global markets.”

India/UK Trade Deals & Trans-Pacific Partnership

In January the British Government entered into new trade deals with India bringing huge benefits for Scotch whisky producers.

Mark Kent, Chief Executive of the Scotch Whisky Association, said:

“Launching UK/India trade talks offers a golden opportunity to reach an ambitious tariff reduction in an early harvest deal that could grow Scotch Whisky exports to India by £1 billion over five years. Tackling the tariff and State level regulatory issues would open the market up to smaller producers who are effectively locked out by the substantial barriers to trade.”

Trans-Pacific Partnership

Commenting on the UK Government’s announcement that the UK will be joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Scotch Whisky Association Chief Executive, Mark Kent said:

“Exports of Scotch Whisky to the CPTPP countries have grown significantly in the past decade, collectively reaching more than £1.1bn in 2022. The UK’s accession to CPTPP will open up new opportunities for Scotch Whisky and other UK products in key markets in the region, including the phased elimination of Malaysia’s import tariff.  With the potential for more countries to join CPTPP in the coming years, Scotch Whisky will benefit from further liberalisation in the region.

Growth

Global exports of Scotch Whisky grew to more than £6bn for the first time in 2022, according to figures released by the Scotch Whisky Association (SWA).

In 2022, the value of Scotch Whisky exports was up 37% by value, to £6.2bn. The number of 70cl bottles exported also grew by 21% to the equivalent of 1.67bn.

Mark Kent SWA Chief Executive:

“The enduring strength of Scotch Whisky as the UK’s leading food and drink export is its global appeal to consumers who recognise the quality of the spirit, with production increasingly grounded in sustainable practices as we continue to reduce our impact on the environment by investing in the future.”

Industry Investment

In response to the interest, the big drinks groups are investing heavily. Last year; Pernod Ricard announced an £88.6 million investment in its Aberlour and Milton distilleries, Jameson Irish whiskey brand unveiled plans for a £221 million carbon-neutral plant.

Diageo, is in the middle of a £185 million investment in Scotch whisky, returning the lost distillery of Port Ellen back to production.

Sector Trends

Scotch Whisky was exported to 174 global markets in 2022
India overtook France to be the industry’s largest global market – exports to India have grown by more than 200% in the past decade alone. India is the largest whisky market in the world but Scotch Whisky has just a 2% share of the Indian whisky market.
The United States recovered to reach over £1bn of exports – the first time since the 25% tariff on Single Malt Scotch Whisky was suspended (£1.06bn in 2019)
In 2022, Laphroaig emerged as the top-performing Scotch Whisky cask distillery, boasting a projected growth rate of 18.75%. Bunnahabhain’s Staoisha followed closely with 17.74%, and Bunnahabhain itself took third place at 17.57%.
Europe accounted for the highest volume of cask investment, at 74.78%, with the UK the largest market with 74.34% of the total share, followed by Asia at 18.35%.
The number of millennials and Generation Z investors rose to 36.49% of total cask buyers, while more women were also investing in casks, at 7.14% of the total, the report added.

News