(AFP) – While most of Scotland voted against leaving the European Union, whisky makers have quietly been raising a wee dram to a side-effect of the Brexit vote — a plunge in the value of the pound.
The currency devaluation has made exports cheaper, generating a bump since 90 percent of Scotch whisky is sold outside Britain, although the industry warns the longer-term outlook is far more cloudy.
David Williamson, communications director for the Scotch Whisky Association, said: “Because of the relative strength of the pound we’re certainly getting anecdotal reports back from our member companies that has helped to boost exports.”
And Tony Reeman-Clark, who runs the Strathearn Distillery in Perthshire — a relative newcomer to the market — said: “I have been talking to people from bigger distilleries who said there has been a lot of interest, and a lot of sales, because of the weak pound.”
Reeman-Clark, who is also the founder of the Scottish Craft Distillers Association, said Strathearn began producing whisky three years ago and its first 100 bottles were auctioned off on 1 December.
– Global interest –
The first sold for £4,150 to an Italian buyer, far exceeding Reeman-Clark’s expectations.
He said he had received bids from as far away as “Auckland, Beijing, Hong Kong, Israel, Germany, America, all over the world”.
Since the shock June vote the pound has tumbled about 15 percent against the greenback and Graham Hutcheon, the operations director of distiller Edrington, said the industry was having a “jamboree time”.
However, he urged the government to provide clarity on Brexit, Bloomberg news agency reported.
“We don’t know the questions to ask, let alone answer,” said Hutcheon, whose company makes whiskies such as The Macallan and The Famous Grouse.
More than 10,000 people are now directly employed in the industry –- up six percent in the past three years – while a further 30,000 people are employed in its supply chain from bottling to distribution.
The main markets in the first half of this year were the United States (£357.4 million), France (£193.1 million) and Singapore (£99.6 million), with total exports equivalent to 533 million bottles of whisky.
More than 500 million bottles worth around £1.7 billion are exported from Britain every year.
The full impact of Brexit is not expected to be revealed until distillers complete their annual returns in early 2017.
– Cask prices rising –
But while Liam Hughes, head of the Glasgow Distillery Company, told AFP during a tour of the facilities that “there has been a 200 percent to 300 percent increase in terms of inquiries for casks” since June, there is a downside to rising import costs.
Hughes, one of a growing number of craft distillers who have helped boost the industry in recent years, buys all of his casks from Kelvin Cooperage, which moved from the banks of the River Kelvin in Glasgow to Kentucky in the United States in the 1990s.
“As the pound crashes against the dollar the price of the casks goes up substantially, so it’s swings and roundabouts,” he said.
Spiros Malandrakis, senior alcoholic drinks analyst at Euromonitor International, said: “We are going to have a short-term spike, that we are already probably going through and witnessing.”
But he said this would be followed by “medium to long-term uncertainty that could potentially prove to be quite damaging.
“Brexit has definitely created a certain boost, primarily from tourists visiting the UK and buying from here,” he said.
Another unknown is whether Scotland will decide to go its own way by making another bid for independence as Britain leaves the EU.
“That might take away some barriers from Europe but then it could create barriers on the side of the UK,” he said.