Scotch Whisky (Contribution to Tourism)

Part of the debate – in the Scottish Parliament on 27th February 2018.

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Photo of Gordon MacDonald Gordon MacDonald Scottish National Party

I thank Rachael Hamilton for securing the debate. As a whisky drinker with more than 60 bottles of malt at home, I can confirm to Stewart Stevenson that there is, indeed, a little bit of magic in every bottle.

Whisky and whisky tourism is one of the success stories of 21st century Scotland. Ninety-nine million cases of whisky are exported each year and, if every bottle was laid end to end, the bottles would stretch from this Parliament to New York six times over. Visitors to distilleries come from some of the largest markets for whisky—mainly Germany, Scotland, the United States of America, France and other parts of the United Kingdom.

The Scotch whisky industry, through the establishment of the Scotch Whisky Research Institute in my constituency some 40 years ago, aims to safeguard consumer confidence in Scotch whisky and, as a result, will protect whisky tourism. Research is carried out by the institute to ensure that flavour, quality, consumer safety and authenticity are maintained to protect Scotland’s whisky as a premium global brand.

One of the research institute’s first key achievements was the establishment of the compositional database to protect Scotch whisky from counterfeiting. At any moment, there can be around 70 court cases being fought and hundreds of investigations under way in order to protect the industry against fakes. Yet the industry allows whisky to be exported in bulk to places where it can be blended with other whiskies and locally branded, and it then competes with our own whisky, or that same local whisky can be deliberately labelled wrongly and sold as Scotch whisky at a premium price, despite being a counterfeit product.

Blended whisky accounts for 70 per cent by value and 90 per cent by volume of all whisky exported. Malt whisky accounts for only 9 per cent by volume and 24 per cent by value, yet only the premium product, malt whisky, is required under the UK Scotch Whisky Regulations 2009 to be bottled in the country of origin. At the time of the regulations being passed, requiring that malt whisky be bottled in Scotland, the Scotch Whisky Association stated that the export

“of Scotch Whisky in bulk has led to adulteration and contamination when it is bottled abroad. This risks damaging the reputation of Scotch Whisky and leaves consumers vulnerable to counterfeit products which could also have public health implications”.

Given the number of on-going cases and investigations into counterfeit whisky, is it not time that the subject was re-examined? After all, Spain insists that Rioja wine is bottled before export and France has similar regulations in place for cognac.

My Scottish National Party colleague at Westminster, Martin Docherty-Hughes, submitted an early-day motion in December supporting the Unite union campaign, save our Scotch. In recent years, there have been the closures of Port Dundas and Kilmarnock, plus concerns that were raised by the union regarding Leven and Shieldhall. Since 1980, 12,000 directly employed jobs in whisky have been lost in Scotland. Jobs are still under threat at a time when the SWA estimates that Scotland is home to more than 20 million casks of maturing whisky—almost four for every person living here. The concern is not just over-outsourcing of whisky, but other white spirits currently bottled in Scotland and the potential impact that that could have on the supply chain, including bottling plants, labelling and packaging manufacturers, warehousing and distribution.

Each year, £1.7 billion is spent on the whisky supply chain, but not all of it is spent in Scotland. It is estimated that more than £340 million is spent elsewhere, to our detriment. We know that Scotch whisky must be produced in Scotland, made from mostly malted barley and aged in oak barrels for three years or more. However, most of the jobs associated with the industry are not in distilling but in bottling and throughout the supply chain, which we must ensure remains in Scotland.

I will leave members with this thought. Back in 1979, the Scottish Council for Development and Industry discussion paper “Should Scotland Export Bulk Whisky?” concluded that

“Scotland would economically benefit in the long-term if the bulk export of all whisky was banned.”

Given the industry’s importance to Scotland, and to tourism, is it not time that the issue was re-examined?