Scottish food and drink exports
19 Oct 2015
David Frost, SWA chief executive
The Scotch Whisky Association is always present at the SNP's
Annual Conference (as we are at all major party conferences).
But for the first time this year we held our own fringe meeting, on
16 October, to give conference participants a chance to ask
questions about the Scotch Whisky industry and in particular what
we are doing to help support food and drink exports from Scotland
more broadly.
I was delighted that Christina McKelvie MSP, convenor of the
European and External Affairs Committee of the Scottish Parliament,
and Graham Young, industry development director at Scotland Food
and Drink, were able to join me on the panel. We were very
grateful to Laura Goodwin from STV for chairing.
I set the scene by recalling the importance of Scotch Whisky
exports to the Scottish economy. I explained that the
industry brings £4.6 billion of added value to Scotland and 90% of
that is from exports. We sustain nearly 40,000 jobs across
the UK, many of them in remote areas. The average employee
adds £300,000 in value and as a result was among the best paid in
Scotland. In short, I said that our performance affects the
whole food and drink industry and hence the whole Scottish
economy.
Looking at exports, I said that we currently export about £4bn
per year: a third to the European Union, one quarter to North
America, and a fifth to Asia, and the remaining fifth
elsewhere. We have reached this enviable position by:
focusing on making a product that is attractive to aspirational and
increasingly affluent consumers; an absolute focus on quality;
protecting our intellectual property and in particular the use of
the term "Scotch Whisky"; taking a long-term view on trade issues
and opening markets through free trade agreements; and
collaborating closely with governments and international
organisations such as the WTO and the EU.
Finally, on the back of this, I said that the Scotch Whisky
industry had a lot of experience relevant to the broader food and
drink sector. We are working closely with the Scottish
Government on its trade and investment strategy and the
internationalisation of Scottish business, with the Parliament, and
with think tanks and other stakeholders. With others in the
food and drink industry we are looking actively at how we could
help, for example by sharing experience on different markets;
encouraging mentoring by export specialists for those new to
exporting; arranging seminars on market access and protecting
intellectual property; advising on how to navigate the EU and the
WTO; and joining up on events, to make sure that Scottish products
were regularly showcased at whisky events in export markets and
vice versa. Overall, we are determined to help and support
and we hoped to have more to say on this subject soon.
Christina McKelvie MSP told the audience how her Scottish
Parliament committee has depended on the SWA for evidence, for
example when carrying out its inquiry into the internationalisation
of 'Scotland the brand'. She recounted a committee trip to South
Korea, where every billboard she passed on the way from the airport
to the centre of Seoul carried an advertisement for Scotch Whisky.
She cited this as an example of the reach of the work of the
SWA.
Scotland Food and Drink's Graham Young explained that the sector
in Scotland is outperforming the UK as a whole by 200%. He
highlighted that collaboration across the sector is already
happening, for example through the recent promotion in Singapore of
Scotch Beef and lamb alongside Scotch Whisky and seafood and whisky
pairings in London.
We then had a lively question and answer session which ranged
widely.
- There were questions about how we protected the term "Scotch
Whisky" overseas and I explained how important that is to our
business model.
- There was lots of interest in what our industry does to support
Scottish agriculture. I noted that about 85% of the cereals
used in the industry came from Scotland, and we tried to maximise
that number, but the Scottish climate and the need to maintain
rigorous quality standards meant that it would always be necessary
to import some supplies from elsewhere.
- Whilst distillers do not use GM barley to make whisky, I noted
that, in contrast to some others in the agriculture sector, we had
not criticised the Scottish Government's decision to ban commercial
farming of GM foods, though we thought it important to monitor the
situation closely.
Finally, I was not surprised there was vigorous questioning
about minimum unit pricing of alcohol, with some strongly held
views in favour put from the floor. I explained why we had
taken legal action against minimum pricing but underlined that we
were absolutely determined to be part of the fight against
alcohol-related harm and that we worked closely with the Scottish
government with this in mind.
Overall it was a very enjoyable event. I am always happy
with robust debate and we certainly got plenty of that! We
will be back next year I am sure.