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    Worth a Shot: Why the Scotch Industry Is Watching the General Election Hawkishly

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    UK General Election 2017 (130)
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    A month prior to the UK general election, the Scottish Whisky Association published an election manifesto of their own. The relevance of the beloved golden nectar to the impending vote may seem slight, but as one of the UK's leading international experts, and with Brexit on the near-horizon, for the industry the stakes have rarely been higher.

    In their review, the Scottish Whisky Association (SWA) called for a review of the excise duty system and fairer taxes on Scotch, the promotion of a competitive business environment for distillers, greater investment in sustainability, and renewed support for whisky in the UK's industrial strategy.

    ​Moreover, they warned the success of the industry should not be taken for granted by the next government — support was "vital" for Scotch to maintain its contributions to the UK economy.

    Given the size of the Scottish whisky industry, whoever sits in 10 Downing Street after June 8 would be a fool to themselves not to heed SWA's caution — amazingly, the bronzest of bronze liquors adds nearly £5 billion (US$6,5 billion) to the UK's coffers annually, employs around 40,000 and is the single biggest net contributor to the balance of trade in goods. Bottles of Scotch wing their way from Aberdeen, Cromarty Firth and elsewhere to over 200 international locations every year.

    ​Nonetheless, the SWA refuses to make bets on who that will be, and isn't supporting any candidates or parties — instead, they'll deal with whoever ends up in the governmental hot seat post-election.

    ​In any event, the manifestos of major UK parties generally have little positive to say about alcohol.

    The Liberal Democrats offer predictable platitudes on the need to promote healthy eating and exercise and greater awareness of the dangers of excessive consumption.

    Labour pledge to implement a strategy for the children of alcoholics based on expert recommendations.

    The Conservatives promise greater funding for alcohol dependency support.

    And UKIP would repeal the 2003 Licensing Act and enact legislation to reduce the density of alcohol outlets and restrict their trading times — a surprising guarantee, given the party was until June 2016 led by the perpetually pint-holding Nigel Farage.

    ​On the other hand, the Scottish National Party (SNP) manifesto openly recognizes the Scotch industry's importance, calling it a "key sector" of Scotland's economy and advocating a review of alcohol taxation.

    Irrespective of who triumphs in the general election, Brexit will be top of their agenda — and it's top of the SWA's too. Given whisky's international risk, the post-Brexit fortunes of usquebaugh (meaning "water of life" in Irish and Scottish Gaelic) will be a litmus test for the wider success of the UK's secession from the European Union.

    ​Still, SWA recognizes while leaving the EU creates challenges, it also produces potential opportunities. For instance, it could mean a fairer approach to alcohol taxation not constrained by the EU excise structures directive, and new duty-free arrangements for the sale of whisky, reflecting airports' effective status as international Scotch showcases. It could also allow the government to craft agricultural policies more suited to Scotland's domestic conditions, and abolish the EU's controversial "three crop rule" — which requires farms to grow at least three crops in order to receive funding.

    ​Nonetheless, concerns remain. Under World Trade Organization rules, Scotch will continue to benefit from a zero tariff on exports to the EU and US, once Britain has made its exit from the bloc — but if the UK is removed from the EU's network of bilateral trade deals, there is a risk of losing benefits, including lower tariffs, in markets that represent up to 10 percent of whisky exports, such as India, China, and Brazil. Moreover, the SWA hopes EU laws that have had a positive impact on the alcohol industry, such as those governing labeling, spirit drink definitions, and bottle sizes, will be retained in some form in UK law.

    "With ongoing Brexit uncertainty, the Scotch whisky industry needs government action that matches its warm words and enables the industry to grasp the challenges and opportunities which lie ahead. Support at home is needed to underpin and maintain our position as the world's leading spirit drink," said Julie Hesketh-Laird, SWA Acting Chief Executive.

    It seems then that whatever the June 8 result, whisky should — and hopefully will — loom large in political considerations thereafter. If nothing else, the "water of life" will surely be on the menu of every party's post-election party, no matter who prevails.

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    UK General Election 2017 (130)

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    Tags:
    Scotch, Brexit negotiations, whisky, Brexit, alcohol, trade, election, UK General Election 2017, Scottish Whisky Association (SWA), Europe, Britain, United Kingdom, Scotland
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