Whisky Exporters Fear Brexit Hangover

9 May 2016, 07:49

Brexit could put more than £1 billion worth of Scotch whisky exports at risk, industry chiefs have warned.

The head of the industry's representative body, the Scottish Whisky Association, said the European single market is "central to the success of Scotch'' and warned against the UK voting to leave the European Union in the July referendum.

Westminster Environment Secretary Liz Truss is meeting industry figures at a distillery on Monday to discuss the importance of the EU market to the £5 billion-a-year whisky business.

Speaking ahead of her visit to Diageo's Glenkinchie Distillery in Tranent, East Lothian, she said: 2We should all raise a toast to our biggest export success. Europe has a taste for Scotch and the industry will do better if we remain in the EU because whisky producers have hassle free, easy access to the single market of 500 million people.

"I want the industry to continue to be the powerhouse it has become across the world - boosting our economy and creating jobs. The Scotch whisky industry has strong global trade links beyond Europe in America and Asia, and their business leaders are clear that the EU single market provides the best conditions to reach even greater heights.

"Leaving the EU would be a leap in the dark for our great British food and drink industry and could lead to years of negotiations on new trade deals - with no guarantees at the end.''

Europeans are enthusiastic consumers of Scotch, drinking a third of all UK whisky.

The EU single market provides common standards on labelling, certification and licencing, which the SWA said creates a level playing field easing overseas trade in their highly regulated industry.

British whisky exporters also benefit from EU-brokered deals to trade freely with countries such as South Africa, where exports have increased by more than 150% since 2004.

Scotch Whisky Association chief executive David Frost said: "Scotch supports around 40,000 jobs across the UK, adds around £5 billion in value to the economy and is vital to the UK balance of trade. EU membership has many advantages for Scotch. The single market, including its regulation of food and drink, and its single trade policy are central to the success of Scotch. It lets us trade across the EU simply and easily and helps give us fairer access to other overseas markets.''

Ivan Menezes, chief executive of Diageo, the world's largest maker of Scotch whisky, said the firm "strongly believe that we should remain'' in the EU.

He said: "The single market gives us a level playing field and open access across the EU, while the EU's clout in international trade helps to open up new markets with agreements favourable to the UK, reducing tariffs and resolving trade disputes.''

John Edward, senior campaign spokesman for Scotland Stronger In Europe, said: "There is no question that our membership of the European Union is essential to the expansion of Scotch whisky in overseas markets - which in turn boosts jobs and investment at home.

"This iconic industry is a powerful illustration of the positive case for staying in Europe. People in Scotland can come together in the referendum, and get behind success stories like our whisky industry by voting to Remain in the EU.''

Vote Leave published a leaked email from Mr Frost describing David Cameron's EU reform deal as a "massive missed opportunity''.

The Brexit campaign's spokesman Robert Oxley said: "Pro-EU campaigners are unable to comprehend that our leading exports and industries have prospered because of hard work at home, not because of EU membership.

"In fact, we cannot even harness the biggest growth export markets for Scotch whisky because we've handed control over our trade deals to the EU which is terrible at negotiating them.

"It is telling that in private even the Prime Minister's backers recognise how weak his arguments for remain are and how little the renegotiation has achieved - no wonder he's stopped talking about it. If we want to stop handing Brussels £350 million a week and take back control of our trade deals, we have to vote Leave.''