Daily Management Review

Export of Scotch whisky rebounded after Brexit


08/05/2016


Manufacturers and sellers of Scotch whisky recorded growth of export sales. This was facilitated by depreciation of the pound against the background of the Brexit referendum’s results and decision of the Central Bank of England.



Manufacturers and sellers of Scotch recorded significant growth in sales abroad after the referendum on the withdrawal of Great Britain from the European Union (Brexit), said on Friday agency Bloomberg, citing market participants.

"It's like a "Black Friday" for whisky", - said Don Davis, Head of Procurement of London retailer The Whisky Exchange. According to him, after the referendum, there was a "crazy surge in sales - from 30 to 40% growth". 

Sales of Scotch whiskey are growing thanks to devaluation of the pound after the referendum. The currency’s fall accelerated after the Bank of England took a decision to reduce interest rates for the first time in seven years, Bloomberg writes. Devaluation of the pound has reduced price of Scotch whiskey for customers with euro, dollar or the yuan by 10% or more, the agency said. For example, a bottle of Arran 2000 bourbon at The Whisky Exchange store in central London on June 23 was priced at about $ 105. Now, it’s $ 93.18. Price of a bottle of Glen Grant 1968 fell from $ 728.16 to $ 646.11, while the most expensive items in the store, Springbank whisky of 1919, fell by almost $ 9 thousand, to $ 72.3 thousand. 

The store said that about 70% of buyers of whiskey are tourists. At the same time, retailers admit that some tourists are buying whiskey in the UK only to resell it at online auctions back home.

With the pound’s fall, customers have also become interested in more expensive whisky, Martin Simpson, owner of shop and Milroy's bar in Soho, told Bloomberg. "Sales have changed a lot. Bottles of high-end segment are now more popular, and cheaper whisky is not being sold", - he said. 

Diageo company, which produces whiskey under Johnnie Walker brand, in turn, reported that sales have improved even before the referendum.

Scotch whiskey is the UK’s most exported product among food and drinks. Every year, it brings up to £ 4 billion ($ 5.3 billion) in the kingdom's coffers. However, export sales of the beverage fell by 2.8% in 2015.

Manufacturers of Scotch opposed Brexit, insisting that the EU single market is vital to their business, Bloomberg notes. Yet, Diageo's shares rose by 19% against the background of sales growth after the referendum. 

source: bloomberg.com






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