The Scotch whisky industry has more than its fair share of problems on its plate right now. High US tariffs against single malts have badly dented sales in America.
The corona pandemic has slowed global demand. The same with UK pub sales and, although supermarket sales are up, the ongoing lockdowns are not helping.
However, the biggest headache is Brexit or, specifically, the lead-up to it. Despite months of EU-UK negotiations, British industry and particularly importers and exporters – and the whisky industry is a leading exporter – have had no idea what the final outcome will be.
Which makes those hectoring TV ads, ordering industry to “get ready” for January 1 2021, all the more galling. It’s like telling school pupils to swot hard for their final exams, although neither teachers nor pupils have a clue as to what subjects the exams are going to cover.
One immediate, and unsurprising, feature of Brexit is EU importers ordering large quantities of whisky to beat the December 31 deadline and the new bureaucracy and possible tariffs spirits may face after January 1.
That is good short-term news but most whisky firms are resigned to a bleak 2021. One glimmer of hope is an understanding that any shipments landed in Europe by December 31 will be counted as pre-Brexit even if they do not reach their final destination days or weeks later.
Some whisky firms are setting up subsidiaries in Europe, even just one man and a computer, hoping this will facilitate future exports and paperwork.
Taken by and large, export procedures to non-EU countries should remain as they are. One hope is that, with the UK leaving the EU, the US 25% tariff may be dropped, as it was a tit-for-tat retaliation by Trump against the EU. However, what the new Biden administration will do is unknown.
Interestingly, Lord Frost, Britain’s lead negotiator in the EU-UK talks (pictured, top), is the former chief of the Scotch Whisky Association. One can only hope that will spur him to seek a good deal for Scotland’s key export.