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Scotch Whiskey Exports Rise as Canadian Exports Fall

Canadian spirits had a hard year, with exports falling 5% as a liquor duty increased from 2% to 7.8%. While the American market for spirits was looking like a well-armed competitor with its own cut to duty fees, it is Scotland that has really stepped up and started to export increasing quantities of Scotch whiskey.

Scotland is a giant in the worldwide whiskey market, with sales and trade numbers that Canada can’t even come close to.

Canada’s whiskey exports make up the bulk of its spirits export market, but Scotland blows Canada away with record breaking exports of whiskey leaving its borders. At the same time that the Canadian industry is seeing a 5% decrease, Scotland’s is growing; the increase of exports over 2017 led to an 8.9% growth.

Part of the increase in exports from Scotland can be attributed to a weaker pound, making its spirits more affordable as 2017 progressed. This is good news for the country, as the exports of Scotch were steadily falling between 2012 and 2015, and had minimal growth in 2016.

The most growth for Scotland came from China and Russia. Given that Canadian whiskey is purchased by Americans in a staggering percentage—Americans consume 69% of all Canadian whiskey—Scotland’s increased share in those markets isn’t very threatening. However, Scotland does a lot of business in America as well, with Americans being one of the top five markets for Scotch whiskey.

However, with Brexit on the horizon, Scotland is becoming more and more preoccupied with its business in the European Union. With the EU accounting for around 30% of Scotch exports, Scotland needs a strong free trade deal to be able to keep growing its whiskey exports.

At the moment, Scotland has reason to be cautiously optimistic about its industry, and if Canadian spirits want to compete, they need to find out how to compete with a giant.