Scotch Whisky celebrates 4th anniversary of EU-Korea trade agreement

30 Jun 2015

The Free Trade Agreement (FTA) between the European Union and South Korea will have been in force for four years on 1 July.

This agreement delivered a wide range of benefits for consumers and exporters on both sides, including recognition of products with 'geographical indications', such as Scotch Whisky.  Increased contact between Korean and European regulators under the FTA also benefits exporters across the board.

Although the effects of the financial crisis produced a general decline in consumption of spirits in Korea after 2008, with Scotch exports declining in the short run, this has now begun to reverse, and last year the shipment value of Scotch exports to Korea increased 1.65% to £117.3 million, from £115.4 million in 2013. Korea is the eighth biggest export market for Scotch by value. This gives the industry confidence in the future of the Korean market.

Korean consumers are also seeking out premium products, including Single Malt Scotch Whisky which has soared in popularity in Korea from £2.0 million in 2004 to a record £8.4 million last year. Between 2013 and 2014 alone exports of Single Malts to Korea increased by almost 70% from £5.0 million.

A major part of the appeal of Scotch in Korea, and globally, is its consistently high quality, which strict UK and EU legislation, primarily the Scotch Whisky Regulations 2009, helps preserve. To maintain the quality and consistency of Scotch nothing can be added to the three raw materials of water, yeast and cereals during the production process. Master blenders employ their skills and expertise to produce brands that will taste good on their own, with water, on the rocks or mixed to suit the palate of individual consumers across the world.

The definition of Scotch Whisky in these regulations includes strict rules governing distillation and maturation, and sets a minimum strength of 40% alcohol by volume (ABV). The 40% ABV requirement was arrived at following rigorous scientific testing and tasting over many years. It found that 40% ABV was the lowest strength at which whisky can be bottled without affecting the characteristics that consumers have come to know and love. The composition, nosing, tasting and overall quality of Scotch would be adversely affected by filtration if it were bottled below that ABV because of the loss of flavour-giving natural compounds, according to the scientific research.

David Frost, Scotch Whisky Association chief executive, said: "The Free Trade Agreement with South Korea seems to be working for Scotch Whisky. Last year the value of Scotch exports to Korea increased for the first time since the FTA came into force four years ago, following the full elimination of the import tariff.

"South Korean consumers look for quality and premium products, and Scotch Whisky perfectly fits the bill. Scotch has been made for more than 500 years and the rules around its production, including 40% minimum ABV and its geographic indication which means it must be made in Scotland, along with the passion and expertise of those working in the industry, ensure its consistently high standard.  This means that when people buy a genuine Scotch Whisky they can be assured of the finest and the highest quality."

Ends

With media queries please contact Rosemary Gallagher, Scotch Whisky Association head of communications,  0044 131 222 9230 or 0044 7432 605385, email rgallagher@swa.org.uk

www.scotch-whisky.org.uk

@ScotchWhiskySWA