THE Scotch whisky industry has warned distillers are now facing “huge uncertainty” following the Leave vote in Thursday’s EU referendum, as its main lobby group said it was too early to say how the result would affect its campaign against minimum pricing in Scotland.
The importance of the EU free trading bloc is underlined by the most recent data on Scotch whisky exports.
Scotch exports to EU countries were worth £1.2 billion in 2015, figures released by the SWA in May disclosed, meaning that the market accounted for 32 per cent of total global whisky exports last year.
But the SWA said the Leave vote has thrown uncertainty over how distillers trade with the single market.
Chief executive David Frost declared that “urgent attention” must now be paid to clarify the industry’s “future trade arrangements with both the single market and the wider world”.
Mr Frost said: “There is now going to be a period of huge uncertainty, obviously, [while we] work out to what extent existing trade deals will continue to benefit us after Brexit, how exactly will all the EU level law that affects us remain in place, [and] how we will disentangle ourselves from it.
“All that just remains totally unclear. It’s hard to see how anything is going to be that much easier for us. A lot of effort [goes into] dealing with that kind of thing.
“We now need to move forward.”
Asked whether the Leave vote means Scotch distillers are now likely to put major investment decisions, including expansion projects, on hold, Mr Frost said: “I can’t speak for them. What I can say is what underpins investment is growth in emerging markets around the world and the constant aspirational character of Scotch in the growing markets outside Europe [as well] as within in. That is not going to change.”
On whether the industry is likely to be affected by the prospect of a second referendum on Scottish independence, Mr Frost noted: “It’s all part of the general uncertainty. But it is too early to work out what that means.
“We’re still digesting what this referendum means without working what the next one might mean.”
Equally, Mr Frost said it was unclear whether the UK’s exit from the EU would have any effect on the SWA’s battle against alcohol minimum pricing in Scotland.
The issue is now back with the Scottish courts, after the European Court of Justice dealt with the European law aspects of the legislation last December.
One hearing has since been held in the Scottish courts and another is coming up soon.
Mr Frost said: “To be honest it is one of the areas we are still digesting this morning. I don’t think there is anything with authority I can say about that.
“Obviously single market law was an element of the case involved – it wasn’t the only element it affected.
“I think we will just have to think about that in the days to come.”
He added: “It still remains for the Scottish courts to come to a final ruling on it.”
However, in spite of the current uncertainty, Mr Frost backed the Scotch whisky industry to prosper in the long term. He said: “We said before the referendum that we would still be here after Brexit. We weren’t catastrophising about this.
“We’re a great industry. We have faced difficulties in the past and come through them and I’m sure the same will be true this time as well.”
Meanwhile Diageo, one of the SWA’s most powerful members, declared that it was a “priority” that the UK “continues to benefit from open access to the EU as well as favourable international trade agreements”.
Pernod Ricard, the owner of Paisley-based Chivas Brothers, said it remains committed to growing its Scotch whisky and gin business in Britain despite the Leave vote.
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