By Scott Wright

THE chief executive of Chivas Brothers has highlighted the potential of securing freer access for Scotch to India as the distiller announced its sales are now back above pre-Covid levels.

But Jean-Etienne Gourgues concedes there will be no quick solution to the global supply-chain difficulties that mean it is taking longer for its whisky to reach consumers in certain key markets.

Mr Gourgues, who was appointed chief executive of Chivas last year, expressed hope that a free-trade agreement between the UK and India would pave the way for significant growth in whisky sales in the country.

India is viewed as holding enormous potential for Scotch whisky, but exports to the market are impeded by an import tax of 150 per cent.

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Mr Gourgues told The Herald the “odds have never been that high” in terms of a breakthrough.“The high costs and complex regulations of exporting Scotch to India has made it harder for Indian whisky fans to enjoy a wide range of Scotch whiskies,” he said. “This is unfortunate because we know there is great appreciation for Scotch in India.”

Mr Gourgues pointed to opportunities for Scotch in other international markets. He welcomed the free-trade deal between the UK and Australia which removed the 5% tariff on Scotch whisky, putting it on a par with US bourbon, and cited research that shows tariff liberalisation would raise UK spirit sales in markets such as Brazil and Nigeria. “Any tariff suppression could be extremely beneficial for the Scotch whisky industry,” he said.

Dumbarton-based Chivas, part of the Pernod Ricard drinks empire, reported yesterday that sales in the six months ended December 31 were 23% up on the year before. It highlighted a strong performance across Asia, where sales were up 20% amid limited lockdown restrictions, and Eastern Europe, which was up 22%. In Western Europe a strong recovery in Spain, where sales rebounded by 40% after being badly affected during the pandemic, helped drive growth of 10%.

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However, sales dropped 3% in North America amid ongoing supply-chain challenges. Mr Gourgues said sea shipment “is still a bit of problem”, citing difficulties booking containers and then having them unloaded. This has been a notable problem in the US where ports are congested and there is a driver shortage.

Mr Gourgues said the cumulative effect of the logistics problems has been to increase transit times across the Atlantic. “Basically it’s not that easy to move goods from one state to the other ones. Whether it is for Chivas or The Glenlivet, we are not just concentrating on a few states – the pattern of distribution is pretty wide.”

“That has caused a bit of a difference. We landed in the US with a level of inventory which is extremely low, and which causes the difference between our shipments, which are a slight negative, compared with depletions, which are positive on our brands and ahead of the market.”

He added: “We’re working hard to improve that… but that is something which [will] take a bit of time,” he said. “We are not the only one [affected] for sure.”

Meanwhile, Mr Gourgues said it was still “business as usual” so far for sales of Chivas whiskies in Ukraine and Russia, despite mounting international fears of conflict in the region.

Noting that Russia is an important market to Chivas, he said: “It is true that there is a political risk, but in terms of daily life there is no real change in Russia.”

On Thursday, Pernod Ricard reported a record first-half profit from recurring operations of nearly €2 billion as it continued its recovery from the pandemic.