Whisky Exports Plummet as Tariffs and Global Headwinds Bite

The whisky industry is facing a bleak midwinter as tariffs bite and exports stall, with a sharp downturn in production expected due to tough market conditions around the world. According to recent data, Scotch whisky exports to the US, the industry's biggest export market, have been hit hard by tariffs introduced under the Trump administration, which added 10% to importers' costs. In the first half of this year, the value of Scotch exports to the US fell by 12% to £1.2 billion, while volumes declined by 15%. The negative impact of the tariffs is expected to worsen next spring when American tariffs on single malts, which were suspended four years ago, are set to return with a further 25% charge, unless a deal can be done with the Trump administration. Single malts, which sell at premium prices, are a particularly important part of exports to the US. However, the downturn is not limited to the American market. Weakening demand in other markets due to squeezed growth and consumer spending, increased tax and costs, including packaging regulation, and trade disruption have also taken a toll on the industry. Shipments to China, for example, fell by 31% last year, moving it from the fifth biggest market to the tenth biggest. The first half of this year shows a 1% increase in the value of Scotch exports, to £2.5 billion, while volumes were down nearly 4%. The whisky industry's woes are also reflected in the financial performance of leading companies. Diageo, the world's largest spirits company, which owns brands such as Johnnie Walker and Glenfiddich, reported a 10% decline in Scotch sales in the first half of this year. Pernod Ricard, another major player, also saw a decline in Scotch sales, although the company did not provide specific figures. The industry's struggles are a result of a combination of factors, including the impact of tariffs, weakening demand, and increased costs. The whisky industry has been hit hard by the COVID-19 pandemic, which has disrupted supply chains and led to a decline in consumer spending. The industry has also been affected by the UK's decision to leave the EU, which has led to trade disruption and increased costs. Looking ahead, the whisky industry faces a challenging outlook. The return of tariffs on single malts next spring is expected to further exacerbate the industry's woes, and the impact of the pandemic and Brexit on consumer spending and trade is likely to continue. However, the industry is also expected to benefit from growing demand in emerging markets, such as China and India, where whisky is becoming increasingly popular. In conclusion, the whisky industry is facing a bleak midwinter due to a combination of factors, including tariffs, weakening demand, and increased costs. While the industry faces a challenging outlook, it is also expected to benefit from growing demand in emerging markets, and companies are likely to adapt to the new market conditions by diversifying their product offerings and investing in new markets.