Scotch Whisky Association – a vital UK industry :: New research shows £5bn total contribution to the UK economy :: Scotch Whisky supports 40,300 UK jobs - 28th January, 2015

Scotch Whisky is an iconic product recognised around the globe and new research published today (28 January) reveals its vast contribution to economic growth in Scotland and across the UK. 

‘The Economic Impact of Scotch Whisky Production in the UK’ report, commissioned by the Scotch Whisky Association (SWA) from 4-consulting, shows the industry contributes nearly £5 billion overall to the UK economy. For every £1 million of value added, the industry generates another £520,000 across the UK, for example in spending on suppliers in a range of sectors, from packaging to haulage. 

In terms of the value it adds to the UK economy, Scotch Whisky is bigger than a number of industries, such as iron and steel, textiles, shipbuilding and computing. It is also larger than other UK food and drink sectors, including meat, dairy, beer and soft drinks. 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 include:

• Overall economic contribution of Scotch Whisky industry to UK is almost £5bn (£4.956bn).

• Direct economic impact of industry, ignoring its wider economic benefits, is £3.3bn, up 21% since 2008.

• Each year, Scotch Whisky producers spend £1.8bn on suppliers. 90% of that expenditure is in the UK, including £1.4bn in Scotland. Dry goods, including bottles and packaging, cereals, energy and transport and distribution make up the majority of purchases.

• Capital expenditure makes up £140m of the total industry spend. Some 70% of that is outside Scotland in other parts of the UK and overseas. The specialist nature of capital equipment, such as machinery, vehicles and software, means it often has to be sourced from further afield, spreading the impact of the Scotch Whisky industry across a wide geographical area.

• The industry supports 40,300 jobs in the UK - up from around 35,000 in 2008 - in a range of sectors including glass manufacturing and labelling. This total includes 10,900 people directly employed by the industry in Scotland, up 6%.

• Every job in Scotch Whisky supports a further 2.7 British jobs.

• Scotch Whisky workers are among the most productive in Scotland – they are around four times as efficient in production as employees in aerospace, life sciences and the digital sectors.

As well as supporting employment in towns and cities, for example in large bottling halls, Scotch Whisky is the lifeblood of many rural communities where it sustains 7,400 jobs, contributes around £900m in gross value added (GVA) and generates around £250m of income. 

Despite a slowdown in exports, the Scotch Whisky industry is expanding at unprecedented levels with around 30 new distilleries being planned or built across Scotland. Capital investment reached £142m in 2013, up 31% since 2008.  

Finally, Scotch exports are vital to the UK’s balance of trade. They are worth around £4bn a year and without them the UK’s trade deficit would have been 16% larger in 2013. 

David Frost, Scotch Whisky Association chief executive, said: “This new report shows just how significant the Scotch Whisky industry is to the wider UK economy, adding £5bn of value, supporting over 40,000 jobs, and contributing £4bn to Britain’s trade performance. 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. 

“Given the scale and impact of the Scotch Whisky industry we believe the government should show its support. One way of doing so, in the short term, would be for the Chancellor to cut 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.”

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