Scotch whisky boosts UK economy by £7.1 billion

The contribution of the Scotch Whisky industry to the UK economy reached £7.1bn in 2022.

A new report by the Scotch Whisky Association (SWA) also reveals the industry supports 66,000 jobs across the UK, of which 41,000 are in Scotland.

The Scotch Whisky industry is now responsible for generating £3 in every £100 of Scotland’s total Gross Value Added (GVA), and is the second most productive sector in Scotland, ranked just behind energy – including renewables.

A statement from the trade body noted that while Scotch whisky companies have continued to invest to drive employment and productivity, the sector continues to face multiple barriers, including the highest spirits duty rate in the G7, key infrastructure in need of investment, and trade deals – including with India – still to be finalised.

These challenges, combined with rapidly increasing competition from premium spirits in global markets, put future investment and jobs at risk without government support.

Mark Kent, chief executive of the SWA, said: “The past five years have been turbulent for our sector, as we faced retaliatory tariffs in the United States, in addition to the global pandemic and the knock-on economic pressures.

“The Scotch whisky industry has remained resilient, with capital investment directed towards fulfilling our collective sustainability ambitions, creating world-class visitor attractions, and building more distilleries that will help boost jobs and growth.

“Ahead of the UK Spring Budget on 6 March and this year’s General Election, it is vital that the industry is supported by government so that businesses can continue to invest in the UK economy.”

The report found that 75% of the total GVA of the Scotch Whisky industry is generated in Scotland, equal to £5.3bn annually – helped by legislation that requires all Scotch whisky to be distilled and matured for at least three years in Scotland, and all single malt to be bottled in Scotland.

The manufacturing of beverages in Scotland – dominated by scotch – produces £273,000 GVA per employee. Comparatively, the industry is second only to the energy sector at £279,000 per head, in 2019.

Scottish Secretary Alister Jack said: “Scotch is not just Scotland’s, but the UK’s, most valuable food and drink export and that’s why we’ve given it 10 cuts or freezes in duty at the last 11 Budgets, as well as removing punitive tariffs imposed on the US market.

“We are pushing forward with new and robust global trade agreements that will continue to safeguard the interest of Scotch whisky, ensuring that the unique characteristics and reputation of Scotch are protected.”

Wellbeing Economy Secretary Neil Gray added: “The Scotch Whisky industry is extremely valuable to the Scottish economy in terms of production and exports and increasingly also for tourism and hospitality. It supports thousands of jobs – including in rural areas – and is a success story at home and internationally.