Opportunities & challenges in LatAm

18 Feb 2016

A lot of what we do as the Scotch Whisky Association to ensure the industry has fair access to all markets worldwide depends on the European Union.  I recently experienced the value of this support to our exports on a trip to Colombia and Mexico.

Latin America as a whole is already a significant market for Scotch Whisky. Some £460 million of Scotch Whisky is exported to the region, one in every six bottles shipped overseas.

Within the region, Colombia and Mexico are two important markets for Scotch.  And each market has its opportunities and challenges which I learned more about this month when I joined EU Agriculture Commissioner Phil Hogan on a delegation he led to the two countries.

The EU sets the frameworks in which we operate overseas. It leads on free trade agreement (FTA) negotiations and subsequent implementation and it coordinates lobbying with member state embassies. Now, the part of the Commission responsible for Agriculture issues - DG Agri - is supporting trade and growth activities with more technical discussions. These aim to open markets or resolve difficulties for exporters and they provided the backdrop for Commissioner Hogan's visit.

To set the scene, Scotch Whisky has a significant presence in Mexico with whom the EU signed a FTA in 1997. The FTA has been implemented and is supplemented by a Spirits Drinks agreement. The market is well regulated and both national and imported products are available in shops, bars and restaurants and both are thriving. Cooperation between the Tequila producers and the SWA is particularly strong. We realise the importance of exports and work together to improve conditions with overseas markets. We also have a good relationship with the Tequila regulators who verify the quality and authenticity of the product.

The Tequila industry clearly has many parallels with Scotch. I was therefore pleased to see Commissioner Hogan meet Tequila producers and regulators to cement those already strong ties with Europe. Such relationships can only benefit Scotch exports to Mexico.

In Colombia the picture is less rosy. The FTA has been applied for a much shorter time - since 2013.  Colombia is yet to implement its commitments to remove discrimination and protectionism in the spirits market. The EU has called for WTO consultations to resolve the difficulties and this process begins with detailed conversations to look for solutions.

This is where Commissioner Hogan in his round of meetings with the Colombian President, government Ministers and State Governors really supported the Scotch Whisky industry - urging necessary change which should ultimately benefit the whole sector.

I hope that the Mexican experience serves as a good example of how both national and imported spirits can successfully coexist in the market and I look forward to answers being found in this vibrant and dynamic market.

Sarah Dickson, SWA global affairs director