Scotch Whisky is a vital UK industry, contributing £5 billion a year to the UK economy and supporting 40,300 jobs.
The major contribution of the iconic product to economic growth in Scotland and across the UK is highlighted by a report today by the Scotch Whisky Association.
The Economic Impact of Scotch Whisky Production in the UK shows that for every £1 million of value added, the industry generates another £520,000 across the UK in spending on suppliers in sectors from packaging to haulage.
Bigger than a number of industries, including iron and steel, textiles, shipbuilding and computing, scotch whisky is also larger than other UK food and drink sectors, including meat, beer and dairy.
In Scotland, it makes up almost three quarters of the food and drink sector and is three times the size of Scotland’s digital or life sciences industries.
Key findings of the report, commissioned from 4-consulting, include:
l Overall economic contribution of the scotch whisky industry to UK is almost £5bn a year.
l Direct economic impact, ignoring wider economic benefits, is £3.3bn, up 21% since 2008.
l Each year, scotch whisky producers spend £1.8bn on suppliers, and 90% of that expenditure is in the UK, including £1.4bn in Scotland.
l Capital expenditure makes up £140m of the total industry spend.
l The industry supports 40,300 jobs in the UK up from around 35,000 in 2008 including 10,900 direct employees inScotland, up 6%.
l Every job in scotch whisky supports a further 2.7 British jobs, and scotch whisky workers are four times as productive as employees in aerospace, life sciences and digital sectors.
In rural communities scotch whisky sustains 7,400 jobs, contributes around £900m in gross value added and generates around £250m of income.
Around 30 new distilleries are planned or are being built across Scotland. Capital investment reached £142m in 2013, up 31% since 2008.
Without scotch whisky exports of around £4bn a year, the UK’s trade deficit would have been 16% larger in 2013.
Scotch Whisky Association chief executive David Frost said: “Scotch whisky must be recognised as a cultural asset that boosts growth and jobs, supports communities and combines the best of the traditional and the modern.”
He believes the UK Government should support the scotch whisky industry by the Chancellor cutting excise duty by 2% in the March Budget.
“It is unfair on the industry and consumers, and detrimental to the economy, that almost 80% of the average price of a bottle of scotch is taxation,” he added.
A Treasury spokeswoman said: “Scotch whisky is a huge British success story to support the industry we ended the spirits duty escalator and froze the duty on whisky and other spirits at last year’s Budget.
“That means a bottle of scotch whisky is now 42p cheaper than it would have been if the escalator had continued.”
The Government has also introduced the spirits verification scheme to protect the integrity of scotch whisky by allowing consumers in the UK and abroad to identify genuine products.