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Section 5: Scotch Whisky and the World

What is the proportion of home sales to exports?

To help earn badly needed foreign currency after the war, the industry organised a voluntary scheme for restricting releases of Scotch Whisky to the home market. This lasted until 1954, but not until 1960-61 did releases reach their pre-war level. Since that time regular and severe increases in Excise Duty have artificially restricted releases from bond which would reasonably have been expected to rise steadily with increasing prosperity.

Scotch Whisky is one of Britain's principal export products, earning large amounts of foreign currency each year. Exporting is nothing new to the industry and even before the war, Scotch Whisky sales abroad accounted for over 50 per cent of the total. Today exports represent around 85 per cent of all Scotch Whisky sales.

How does consumption of Scotch Whisky in Scotland compare with that in the rest of Britain?

Customs and Excise monthly figures of releases from bond give no guide as to the amount of whisky consumed in Scotland itself. but from inquiries within the trade. it would appear that between 15 and 20 per cent of Scotch Whisky sold in Britain is consumed in Scotland.

How important is Scotch Whisky as an export earner?

As the country's most consistently successful export, Scotch Whisky makes a substantial net contribution to Britain's foreign exchange earnings and to companies' profits. Scotch Whisky is one of the United Kingdom's top five export earners.

To how many countries is Scotch exported?

In recent years Scotch has been exported to about 190 different markets all over the world. The major markets are the European Community, USA and Japan .

Is the European Community an important market for Scotch Whisky?

Sales to Member States other than the United Kingdom are worth almost 40 per cent of exports. If the United Kingdom is included, the EC accounts for over 50 per cent of the total sales of Scotch Whisky.

What are the total stocks of Scotch Whisky in this country?

In 1939 the stocks of Scotch in this country were 374,300,000 litres of pure alcohol, but by 1945 they had fallen to less than 247 million litres. Since then they have risen in response to demand and by 1990 had risen tenfold to 2,543 million litres. Stocks of mature and maturing whisky are now sufficient to cover projected sales for almost nine years.

Is there a large amount of money tied up in whisky stocks?

Financing stocks of maturing whisky is the most significant capital investment which Scotch Whisky companies have to undertake. The long period of maturation which Scotch Whisky must undergo poses a number of commercial problems. Not the least among these is the difficulty of forecasting accurately the demand for whisky several years ahead, which blenders must do when deciding how much new whisky to buy in any one season.

Can Scotch Whisky be purchased as an investment?

Both new fillings and matured whisky are sometimes purchased as a form of speculation with the intention of reselling them at a profit. It should be emphasised that only an extremely small proportion of the total amount of whisky distilled in Scotland is bought and sold in this way. All the principal blending companies finance their own stocks of whisky and buy mature whisky only when they happen to find themselves short of a particular type or make. There is no organised 'Whisky Exchange' as exists for other commodities, nor is there any officially recognised list of buying and selling prices for whisky of different types and ages. This type of business is highly speculative and The Scotch Whisky Association does not, as a matter of policy, offer any advice on the purchase or sale of whisky as an investment.

© SWA 1995