Section 5: Scotch Whisky and the World
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
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.
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
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.
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 .
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
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.
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.
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