Latest news with #ScotchWhiskyAssociation
Scotsman
5 days ago
- Business
- Scotsman
Inside the BBC Hunting the Whisky Bandits
Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... If, like me, you are a whisky fan, you'll no doubt have seen some interesting adverts on social media promising amazing returns on investing in whisky casks. The trading of casks has been around for decades, but it's becoming more common these days as the industry faces one of the biggest boom times. Advertisement Hide Ad Advertisement Hide Ad Many of these cask companies have hit the headlines for being fraudulent. One of the biggest was the case of Casey Alexander, 26, who scammed $13m [£10.4m] out of American pensions, with buyers thinking they were investing in Scotland's lucrative whisky trade. There is no official or published record of the buying and selling of whisky casks and no established legal process for the trade. According to the Scotch Whisky Association (SWA), exports of the drink in 2022 grew by 37 per cent by value to £6.2 billion. The membership organisation, regarded for its work representing the Scotch whisky sector, does not offer advice to private investors. While these fraudulent investments have been sporadically reported, it has taken the BBC's Disclosure programme to showcase just some of the people who have been scammed - as well as confronting some of the businesses doing so. The programme and podcast came out in late March. Last month whisky writer and Keeper of the Quaich Felipe Schrieberg , independent whisky broker, market analyst and consultant Mark Littler - who set up educational tool Protect your Cask last year - and one of the producers on the show, Laurence Cook, hosted an online webinar to discuss how the programme was made and gave their thoughts on what can be done. Advertisement Hide Ad Advertisement Hide Ad Nomad_Soul - Mr Schrieberg said there should be little trust in any business advertising sales of whisky casks . He said: 'The way that most of these firms work is they're either selling something that doesn't exist or they're selling something that does exist, but the prospective client or investor is massively overpaying for it.' He added: 'We think that the current wave of what we're seeing is many orders of magnitude larger than the last scammer wave of 25 years ago and it's our opinion, based on what we've seen and researched, that the industry response to the problem has been fairly lacklustre.' Mr Cook, a freelance audio/visual BBC producer, said he was not sure this investigation would be as good as his former work on Donald Trump's golf course in Aberdeen, but then quickly changed his mind once he saw the scale of the problem. He said: 'Sam Poling, who's the reporter on it [the show], gave me a PowerPoint presentation, which detailed just a slither of the findings and just that little kind of amuse bouche was enough to let me know that this world of cask whisky investment fraud and the people behind it was just as mad and just as bad as as any other story that I'd worked on. Advertisement Hide Ad Advertisement Hide Ad 'But also it was ongoing. This is not a historical story, this is something that's happening right now. So there was a real public interest angle to this, which was about catching the baddies right, it was about proving that these people are doing what victims were saying that they were doing. 'I think it's probably quite important that this was made by people who could look at whisky as a commodity rather than as something kind of holy - not to characterise people in the industry too much in that direction. But it was useful to look at it as basically a criminal commodity, a thing that you can use to extract money from people.' Mr Cook said many people had been broken in the aftermath of being scammed. He said: 'We found people who hadn't told their families the true scale of the loss. We found people who had contemplated taking their own lives. 'We found people who would talk to us for background conversations, but wouldn't talk on air because of the shame that they felt beyond the financial. And I should say that that nobody that we spoke to could afford to lose money, nobody we spoke to wasn't massively affected by this. But beyond the financial, there are massive massive human costs here, which are also about a lack of trust. Advertisement Hide Ad Advertisement Hide Ad 'There are lots of people out there left in the dark as to whether their asset exists or not, or if it ever did or if it sold multiple times and it consumes people's lives. It totally occupies their mind all the time. 'It's a horrendous thing. To be burgled is the invasion of your space, but to be defrauded, there is no locale. It's just all in your head and your heart. There's a lot of people that are really broken by this.' As for what can be done? Mr Schrieberg said the Scotch Whisky Association needs to do more, adding: 'Great whisky relies on honesty, integrity and transparency. The best stories come from this, the reason we fell in love with the industry comes from this. 'The best distilleries work very much valuing these principles and all of a sudden we're seeing something that undermines it on every single one of these fronts. Because the SWA's remit is to protect the values that make Scotch whisky great and therefore keep it as a valuable product held in high esteem around the world, they should be weighing in - that's my opinion. There is a good debate to be had about that, but the industry's got to do more.' Advertisement Hide Ad Advertisement Hide Ad Independent bottler the Whisky Baron has launched a petition calling on better regulation of the Scotch whisky market. A spokesperson said: 'Despite whiskey being Scotland's national drink and a key part of the UK economy, HMRC have done nothing to protect or regulate the cask industry. 'The Scotch Whisky Association continues to protect and advocate for Scotch as a category, but they have done very little with their position to make tangible changes in the cask market. 'Distilleries are hands-off with the issue and even societies within the whisky world like the Keepers of the Quaich have remained quiet. Tens of millions of pounds of fraud has already been uncovered and as a hands-on trader entrenched within the industry I can assure you we have only scratched the surface. Advertisement Hide Ad Advertisement Hide Ad 'Please act now so that we can put an end to this madness. Scotch is a drink of the people and we the people need to protect it from these rogue traders.' In response to whisky investment companies recently going bust, and whisky cask investment in general, a spokesperson for the Scotch Whisky Association said: 'We are aware of the dissolution this week of two companies who deal in personal cask investment. This is obviously of significant concern to those who have invested in these companies, and we are signposting those who have been impacted to the appointed administrators for queries on cask purchases. The Scotch Whisky Association (SWA) is a trade association which represents its members on a range of issues, but we are not involved with, nor do we regulate, the cask investment trade. The SWA is not involved with the companies that have entered administration, and they are not members of the SWA.
The Herald Scotland
22-05-2025
- Business
- The Herald Scotland
Scotch whisky giant Diageo reveals $150m a year tariffs blow
The Johnnie Walker and Smirnoff maker updated the City shortly after the UK reached an agreement with the US which will subject goods entering America from here to an import tariff of 10%. Previously, a 25% tariff slapped on imports of single malt Scotch whisky during Trump's first term is understood to have hit exports by around £600m. While Diageo, which employs around 30,000 people, is striving to cuts costs, it did not comment on whether jobs would be impacted by the cuts it announced The company said yesterday: 'Assuming the current 10% tariff remains on both UK and European imports into the US, that Mexican and Canadian spirits imports into the US remain exempt under USMCA (United States-Mexico-Canada Agreement), and that there are no other changes to tariffs, the unmitigated impact of these tariffs is estimated to be c.$150m on an annualised basis. 'Tariffs between the US and China do not have a material impact on our business. We expect that given the actions that we have in place already, before any pricing, we will be able to mitigate around half of this impact on operating profit on an ongoing basis. 'Looking ahead, we will continue to work on measures to mitigate this impact further. Our long track record of managing international tariffs gives us confidence in our ability to navigate this successfully. The expected impact in fiscal 25 and fiscal 26 is included in our guidance.' The update on tariffs came as the Scotch whisky industry continues to be buffeted by global headwinds, with US tariffs, economic slowdown in key markets, and geopolitical uncertainty weighing on demand. Figures published by the Scotch Whisky Association in February showed the value of exports fell by 3.7% to £5.4bn in 2024, with the SWA citing difficulties presented in the domestic market by high excise duty and input costs. However, more recently spirits in the industry were lifted by the signing of the UK-India free trade agreement, under which Indian tariffs on whisky and gin will be halved from 150% to 75%, before being reduced to 40% by the tenth year of the deal. Read more: Diageo reported that organic net sales had increased by 5.9% to $4.4bn in its third quarter. However, the Guinness and Gordon's gin maker said the rise was 'supported by favourable phasing, which we estimate contributed c.4% of Q3 group organic net sales growth, mainly from North America and to a lesser extent Latin America and [the] Caribbean, and is expected to reverse in Q4'. Sales in North America increased by 6% to $1.9bn, with net sales of spirits up by 7% as distributors pulled imports forward in anticipation of tariffs which the company expects to reverse in quarter four. Net sales in Europe were 'broadly flat' at around $900m, as 'continued strong momentum in Guinness' was offset by 'further softness in spirits across key markets'. The company did not change its expectations for the full year and expects a 'slight decline' in organic operating profit in the second half, broadly in line with the decline in the first half. 'This includes the impact of the tariffs currently announced which will impact fiscal 2025,' Diageo said. Diageo launched the first phase of its Accelerate programme to create a 'more agile operating model', which it expects to deliver around $3bn of free cash flow per year from 2026, 'increasing as performance improves'. The programme will be supported by around $500m of cost savings over three years, 'which will enable both reinvestment in future growth and improved operating leverage'. Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: 'Diageo managed to serve up solid growth in the first quarter, with sales benefiting from a good mix of both price and volume growth. Diageo has a world-class cocktail of brands, including Guinness, Smirnoff, Johnnie Walker, and Tanqueray. These powerhouse brands have helped all regions manage to squeeze through price hikes except Asia Pacific, which continued to see consumers downtrading to cheaper brands, which weighed on sales. 'The current tariff regime is expected to cost around $150m annually. Diageo expects to be able to offset around half of this through streamlining operations and will likely lean on price hikes to help offset the rest. But this will take a bit of time to enact. Alongside a soft first-half performance, full-year organic operating profits are expected to decline slightly. Zooming out, the picture is starting to look a touch better than it has for some time. Sales to China are largely unaffected by tariffs, Latin America and the Caribbean are lapping some weak comparable figures, and there are early signs that the industry is recovering from its cyclical hangover.' Diageo chief executive Debra Crew said: 'In the third quarter we delivered strong organic net sales growth and are on track to deliver on our guidance of sequential improvement in organic net sales performance in the second half of fiscal 25. We also reiterated our organic operating profit outlook for fiscal 25, including the impact of tariffs based on what we know at this time. We continue to believe in the attractive long-term fundamentals of our industry and in our ability to outperform the market. We view the near-term industry pressure as largely macroeconomic driven, with continued uncertainty impacting both the timing and pace of recovery. 'Consistent with our strategic priorities and our focus on what we can manage and control, we are introducing the first phase of our Accelerate programme. This sets out clear near-term cash delivery targets and a disciplined approach to operational excellence and cost efficiency. It will strengthen Diageo by increasing our effectiveness, agility, and resilience. It will also ensure that we are well-positioned to deliver sustainable, consistent performance while maximising shareholder returns; even if current trading conditions persist.'
Yahoo
21-05-2025
- Business
- Yahoo
As Scotch whisky industry cheers UK-India FTA, questions remain
You can hardly blame the Scotch whisky industry for all the kerfuffle surrounding the announcement of the India-UK free trade agreement (FTA), and specifically the halving of import tariffs from 150% to 75%, with a further cut to 40% within the next decade. One article talked of the FTA idea having been floated around 'since the premiership of Boris Johnson'. Well, it's true that there was some excited (but premature) chatter of a deal at the time – largely, I'd argue, to distract attention from the shambles of Brexit – but I reckon I first wrote about the prospects of tariff cuts for Scotch in India at least 20 years ago. So it's taken a while. Scotch Whisky Association (SWA) chief executive Mark Kent labelled the deal 'transformational', repeating the organisation's projections that it has the potential to increase Scotch whisky exports to India by £1bn ($1.34bn) over the next five years, creating 1,200 jobs in the UK. Kent also suggested the move would give 'discerning consumers in a highly educated whisky market far greater choice from SME Scotch whisky producers, who will now have the opportunity to enter the market'. I haven't seen the SWA's workings and I've no reason to doubt the good faith of those figures but meeting that value forecast entails increasing shipments fivefold versus the total of just under £250m recorded in 2024 (HMRC data). For a trade organisation often characterised as conservative and cautious, that's pretty bullish. As for SME Scotch whisky producers, I'm sure that many of them will want to enter India and I'm equally sure that they're under no illusion about the challenges they face. India is a huge and incredibly complex market in which to operate – and that doesn't change just because the tariffs have been halved. Even Indian brand owners complain about tax levels and the 'bureaucratic hurdles' that they say sometimes make it easier for an international brand to establish itself than one made in a neighbouring state. Many have tried – and failed – to push up retail sales prices to counteract rising costs. India can be chaotic. Just look at Delhi: in November 2021, the city privatised its previously state-owned liquor retail network, aiming to eliminate corruption and open up investment in the ramshackle network of stores in the city. Within months, the shiny new system was in pieces, corruption had if anything worsened and a race to the bottom on pricing was driving stores out of business. The tariff cut is also good news for Indian companies By July 2022, the city had reverted to the old model but the reverberations continue: Pernod Ricard is still locked out of the market, refused a licence because of allegations that it broke the rules governing relationships with retailers during the brief privatisation experiment (allegations which the company strongly denies). Whatever the rights and wrongs of that case, it illustrates the complications of operating in a drinks market that is highly regulated and heavily politicised. Outside GST (Goods & Service Tax), alcohol is the biggest revenue provider to the state. Each individual state has its own political agenda and its own regulations, meaning companies will have to register their products in each one. If the US is said to be 50 markets, rather than one, India is 28. Then there is the competitive landscape. The tariff cut is also good news for Indian companies, which import vast amounts of bulk Scotch for their huge IMFL brands. The largest such importer, Radico Khaitan, reckons it will ship in Rs2.5bn (US$29m) of Scotch in the 2025-26 fiscal year alone. India's distillers will reap the tariff dividend, too and their increasingly high-quality premium-and-above brands – the likes of Rampur, Royal Ranthambore and Paul John – are capturing the attention of a local clientele only too happy to take pride in drinking their own whiskies (something encouraged by Prime Minister Narendra Modi's 'made in India' mantra). We also shouldn't expect this FTA to be the last that India ratifies in the near future. Deals with the US and the EU are expected, raising the prospect of tariff reductions for American and Irish whiskey. Sazerac's relationship with John Distilleries (the US company acquired a stake in the business in 2017) is not just about finding export markets for Paul John single malt. In other words, the situation – while still highly positive for Scotch – is more complicated than it might first appear. And that's before we get to the acid test: what will be the concrete effect on pricing for Scotch in India and how will that impact sales? It was intriguing to hear Diageo CFO Nik Jhangiani's take on this during the company's Q3 analyst call this week, when he said: 'If you look at that reduction for about 150% down to the 75% initially, that will enable probably a high single-digit decrease in consumer price and we believe that should drive a similar high single-digit percentage increase in volumes.' Great but hardly 'transformational' and there's a bit of devilry lurking in the detail, too. All single malts must be bottled in Scotland but some of Diageo's blends are BII (bottled in India) and others BIO (bottled in origin). The latter will reap the full benefits of the tariff reduction, whereas the former will get this only on the liquid itself, with bottling and packaging costs unaffected. Most interestingly, Jhangiani said that 'we do intend to pass that through to consumer pricing fully'. Given that companies commonly invest a bit of margin to keep prices down in a high-potential market like India, the clear temptation (especially at times like these) would be to use the tariff benefit to cut prices but also to beef up the bottom line at the same time. Will others follow Diageo's lead? Given challenging trends in other markets, might some be tempted to slash prices to chase volume, triggering a price war? That would be hugely counter-productive to Scotch's long-term efforts to build its aspirational image among the world's most whisky-crazy population but we can't rule it out – particularly as, according to local reports, the deal does not include any MIP (minimum import price) arrangements that would prevent this. There's no doubt the UK-India FTA is a landmark deal that could and should give a much-needed boost to Scotch whisky exports both in the short and long term. But questions remain, especially with regard to non-tariff barriers on both sides of the equation. Is there the political will for India to ease some of the state-level and regulatory barriers not just for Scotch but for other imported (and domestic) spirits? For Indian whisky, will key export destinations countenance relaxing some of their own rules, particularly around minimum maturation periods? There's an argument to say that a whisky aged for two years in the heat of India can appear more 'mature' than one that has spent three years in a chilly warehouse in Scotland. There's much to celebrate in this FTA but I suspect that we are only at the beginning of a much longer and more involved conversation about India and whisky that will be played out in the years ahead. And those SWA projections of an extra £1bn? They still look pretty ambitious to me – but the truth is that, at this stage, nobody really knows the size of the prize for Scotch in India. "As Scotch whisky industry cheers UK-India FTA, questions remain" was originally created and published by Just Drinks, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. 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Scotsman
17-05-2025
- Business
- Scotsman
On World Whisky Day let's celebrate this amazing spirit
World Whisky Day | New Africa - Happy World Whisky Day! To mark this 'day of global whisky celebration' The Scotsman has put together some content for you to enjoy as people across the globe are invited to sample a dram. Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... World Whisky Day takes place annually on the third Saturday in May, but whisky is, of course, something that can be enjoyed – responsibly – on any day of the year. While there are amazing whiskies available from several countries, from the US to Ireland and Japan, Scotland remains the largest producer of whisky and Scotch is known and loved across the globe. Advertisement Hide Ad Advertisement Hide Ad According to insight from the Scotch Whisky Association, more Scotch is enjoyed globally than Irish, American and Japanese whiskies combined There are currently around 150 distilleries producing Scotch whisky across the five regions of Campbeltown, Highland, Islay, Lowland and Speyside. Examining the facts and figures from the SWA, Scotch whisky accounts for around three quarters of all Scottish food and drink exports and provides around £7bn in gross value added (GVA) to the UK economy. More than 40,000 people are employed in the Scotch whisky industry in Scotland and over 25,000 more jobs across the UK are supported by the industry. Some 22 million casks lie maturing in warehouses in Scotland waiting to be discovered - that is around 12bn 70cl bottles. While our national drink undoubtedly remains a success story, it has been hit by economic and political headwinds in recent times, and competition from others whiskies, and other drinks, has intensified. The value of Scotch exports last year was £5.4bn, down 3.7 per cent on 2023 due to a mixture of pressures, such as consumers cutting back on spending and turbulence in international markets. Advertisement Hide Ad Advertisement Hide Ad And the IWSR described 2024 as a tough year for the beverage alcohol market in general, not just whisky. It said last year fell short of forecasted expectations as key markets around the world underperformed, impacted by such factors as a move away from super-premium spirits and ongoing weakness in the Chinese market. But there was very welcome news earlier this month when the UK-India trade deal was signed after many years of negotiation. This has been described as 'transformational' for Scotch in terms of export opportunity and job creation. Another great strength of Scotch to be highlighted on World Whisky Day is its role as a cultural icon for Scotland and as a major visitor attraction. Many of Scotland's distilleries have visitor centres and offer increasingly innovative tours. Around two million visits were made to Scotch distilleries in 2022, with people spending more than £85m in total at sites across Scotland, up 90 per cent since 2010, said the SWA in its report. Advertisement Hide Ad Advertisement Hide Ad This trend is supporting rural communities across Scotland. As well as distillery visits, tourists flock to whisky bars and other attractions in cities, such as the Scotch Whisky Experience and Johnnie Walker Princes Street in Edinburgh. And there are a growing number of urban distilleries, including the likes of Holyrood and Port of Leith in the Scottish capital and The Clydeside Distillery in Glasgow. Meanwhile, whisky festivals are continuing to spring up across the country. The Scotsman Food and Drink Editor Rosalind Erskine recently attended the Spirit of Speyside Festival. Celebrating its 26th anniversary, the festival said it has grown in stature, establishing itself as one of the world's largest and is a major contributor to the local economy. The Campbeltown Malts Festival runs from this Monday until May 24. And The Fèis Ìle - Islay Whisky Festival – will take place from May 23 to 31, celebrating the 'Whisky Isle', its culture and its spirit, with tastings, tours, music and events. This is just a snapshot of the whisky gatherings of all sizes that take place across Scotland throughout the year. Advertisement Hide Ad Advertisement Hide Ad But this is World Whisky Day, so it's important to recognise the significance and growing popularity of whiskies from other parts of the globe. Just across the border, English whisky is making its mark. According to the English Whisky Guild (EWG), it is 'witnessing unprecedented growth', with drinkers 'discovering and experiencing a spirit produced with incredible flavour diversity and to the highest standards'. There are now 45 active English whisky distilleries. A proposal has been put forward by the EWG to Defra to gain Geographical Indication (GI) status for English whisky to allow it to be defined as single malt. GI status protects a product's name and quality based on origin and can be applied to food, drink and agricultural products, such as Scotch whisky. The EWG has said: 'Ensuring quality and innovation are at the forefront of all we do, so it is vital for this fast-growing English Whisky industry to receive GI status and legal protection.' Advertisement Hide Ad Advertisement Hide Ad This has provoked a backlash from the SWA, among others, who argue it would undermine the single malt Scotch whisky category. While this debate rumbles on, other whiskies already have single malt status, including 'American Single Malt Whiskey'. There is also a view that if whisky, or whiskey, is being talked about, and the pros and cons of different types of whiskies are being discussed, more people will enjoy it across the world.
Agriland
13-05-2025
- Business
- Agriland
Scotch whisky sector welcomes ‘transformational' UK-India trade deal
The Scotch Whisky Association has welcomed what it regards as the 'transformational' trade deal confirmed between the UK and India. Mark Kent, chief executive of the association said that the free trade agreement is a once-in-a-generation deal and a landmark moment for Scotch whisky's access to the world's largest whisky market. Kent said: 'The reduction of the current 150% tariff on Scotch whisky will be transformational for the industry. 'The deal has the potential to increase Scotch whisky exports to India by £1bn over the next five years and create 1,200 jobs across the UK.' Meanwhile, the Agricultural and Horticultural Development Board (AHDB) is pointing out that, for some time, the narrative around UK malting barley demand has been somewhat lacklustre. The trend of fewer younger people drinking has capped growth in usage by the brewing, malting, and distilling (BMD) sector. Demand for barley Human and industrial (H&I) usage (mainly made up of BMD demand) of barley in 2024/25 is expected to fall for the second consecutive year, according to the most recent UK cereal supply and demand estimates. At 1.782Mt, barley H&I usage this season is 7% down year-on-year and 4% on the previous five-year average. AHDB analysts also point out that while it is likely that US President Donald Trump's tariffs may impact UK whisky trade, the new deal with India has the potential to outweigh any possible drop in demand from the US. The UK-India trade deal also has the potential to bolster UK malting demand at a time when trends are pointing to a reduced domestic demand. Figures produced by AHDB indicate a total UK barley availability figure of 8.484Mt in 2024/25. This is up 50Kt year-on-year. The estimate of full season barley imports remains at 175Kt, down 26Kt year-on-year but well above the five-year average. From July 2024 to January 2025, the UK imported 124Kt of barley, with the pace expected to slow throughout the remainder of the season. H&I barley usage is estimated at 1.782 Mt, down 56Kt from January's estimate and 128kt lower on the year. The decline year-on year and from January is driven by sluggish BMD demand, which can be partly attributed to the increase in the cost of living. At 4.374Mt, usage of barley in animal feed is relatively unchanged from the previous estimate, but 189Kt higher than in 2023/24. Due to its relative availability and competitive price to wheat this season, barley is featuring in compound feed rations at a higher rate in 2024/25. However, the increase is largely due to a rise in fed-on-farm usage, again, due to its price relative to wheat and pressure on malting barley premiums.
