Why Are Salmon Exports Thriving While Scotch Whisky Sales Plummet?

Scottish salmon has once again affirmed its status as the UK's largest food export, with a notable 9% increase in export tonnage despite a decline in average price. Conversely, exports of Scotch whisky have witnessed a minor decrease, highlighting contrasting fortunes for these iconic Scottish products. This article delves into the latest export figures, the impact of tariffs, and the emerging markets for both Scottish salmon and Scotch whisky.

Last updated: 20 October 2023 (BST)

What’s happening now

Recent statistics from HM Revenue and Customs (HMRC) reveal that Scottish salmon continues to dominate the UK food export market, reaching about 111,000 tonnes. However, the average price has seen a drop, leading to a total export value of £828 million, down £16 million from previous figures. In contrast, Scotch whisky exports fell slightly to £4.36 billion, with a 4.3% reduction in volume compared to last year. Both products are currently subjected to a 10% tariff on imports to the USA, which has complicated their export dynamics.

Key takeaways

Scottish salmon exports increased by 9% in volume to 111,000 tonnes.
Export value for Scottish salmon dropped to £828 million.
Scotch whisky exports decreased by less than 1% to £4.36 billion.
The USA remains the largest market for both products, despite tariffs.
China is rapidly emerging as a significant market for Scottish salmon.

Timeline: how we got here

To understand the current state of Scottish salmon and Scotch whisky exports, it is essential to look at key milestones:

April 2022: The US imposes a 10% tariff on imports of salmon and Scotch whisky.
2023: Scottish salmon exports increase in volume, with a notable rise in shipments to China.
2023: Scotch whisky exports show a slight decline, with tariffs affecting the market dynamics.

What’s new vs what’s known

New today/this week

Current figures indicate a robust growth in Scottish salmon exports to the USA, exceeding £300 million, driven by a 34% increase in value despite the existing tariffs. In addition, China has emerged as an increasingly critical market, with a 55% rise in volume of Scottish salmon.

What was already established

Historically, Scotland's salmon and whisky industries have been significant contributors to the UK economy. The introduction of tariffs has posed challenges, particularly for Scotch whisky, which saw a peak in sales above £1 billion before the tariffs were imposed.

Impact for the UK

Consumers and households

For UK consumers, the fluctuating prices of salmon and whisky reflect broader trends in import costs. The 10% tariffs could lead to increased retail prices, impacting household budgets. However, the growing demand for quality seafood suggests potential for continued interest in Scottish salmon.

Businesses and jobs

Businesses involved in exporting Scottish salmon are likely to benefit from increased demand in Asia, particularly in China. Conversely, Scotch whisky producers may face challenges due to tariffs and rising operational costs, potentially affecting employment levels in the sector.

Policy and regulation

The UK government continues to navigate complex trade relationships, particularly with the USA, where tariffs have been contentious. Ongoing discussions on trade agreements could influence future export opportunities for both salmon and whisky.

Numbers that matter

111,000 tonnes: Volume of Scottish salmon exported, a 9% increase.
£828 million: Total value of Scottish salmon exports, down £16 million.
£4.36 billion: Value of Scotch whisky exports, a decrease of less than 1%.
35,000 tonnes: Volume of Scottish salmon exported to the USA, up 44%.
220 million: Equivalent number of standard 70cl bottles of Scotch whisky imported by India.

Definitions and jargon buster

HMRC: Her Majesty's Revenue and Customs, the UK government department responsible for tax collection and border control.
Tariff: A tax imposed by a government on imports to raise revenue or protect domestic industries.
Export: The sale of goods or services produced in one country to buyers in another country.

How to think about the next steps

Near term (0–4 weeks)

In the immediate future, businesses will need to reassess their pricing strategies in light of fluctuating export values and tariffs. Monitoring changes in consumer demand, particularly in emerging markets like China, will be crucial.

Medium term (1–6 months)

As the international trading environment evolves, companies should explore diversification into new markets while managing costs associated with tariffs. The potential for growth in the Asian market may require tailored marketing strategies.

Signals to watch

Updates on trade negotiations between the UK and the USA.
Changes in consumer demand patterns in both established and emerging markets.
Monthly export figures for salmon and whisky from HMRC.

Practical guidance

Do

Monitor market trends and adjust business strategies based on consumer preferences.
Consider expanding into emerging markets, especially in Asia.
Engage with stakeholders to discuss challenges posed by tariffs.

Don’t

Over-rely on traditional markets without considering diversification.
Neglect the importance of branding and quality assurance in competitive markets.
Underestimate the impact of geopolitical tensions on trade.

Checklist

Review current export agreements and tariff implications.
Assess supply chain capabilities to meet rising demand in specific markets.
Evaluate pricing strategies in response to changing export values.
Stay updated with industry news and regulatory changes.
Engage with local and international trade associations for support.

Risks, caveats, and uncertainties

While the figures indicate promising growth for Scottish salmon, the impact of tariffs on Scotch whisky exports presents a significant risk. The evolving geopolitical landscape may lead to further changes in trade policy, which could disrupt current market dynamics. Additionally, consumer preferences can shift rapidly, making it essential for businesses to remain agile and responsive.

Bottom line

The contrasting fortunes of Scottish salmon and Scotch whisky exports highlight the complexities of the current trading environment. While salmon remains robust, particularly in emerging markets like China, Scotch whisky producers face ongoing challenges from tariffs and market fluctuations. Businesses must remain vigilant and adaptive to navigate these changes effectively.

FAQs

What is the current status of Scottish salmon exports?

Scottish salmon exports have increased by 9% in volume, totalling 111,000 tonnes, despite a decrease in average price, maintaining its position as the UK's top food export.

How have tariffs affected Scotch whisky exports?

Scotch whisky exports fell slightly due to a 10% tariff imposed by the US, leading to a decrease in volume and value, although India remains a significant importer despite higher tariffs.

What markets are important for Scottish salmon and Scotch whisky?

France remains the largest market for Scottish salmon, while the US is the largest for Scotch whisky. However, China is rapidly growing in importance for salmon exports.