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.