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UK: Minimum pricing threat to Scotch whisky exports - SWA

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Minimum pricing on alcoholic drinks in Scotland could set a precedent for foreign governments that would be "immensely damaging", Scotch Whisky Association chairman Paul Walsh has said.

Walsh, who is also CEO of Diageo, used a speech to delegates at the Scotch Whisky Association's (SWA) annual Members' Day yesterday (12 May) to attack the Scottish government's plan to introduce minimum pricing per unit of alcohol.

The move, which will be debated in Scotland's Parliament this autumn, is part of the ruling Scottish National Party's strategy to tackle alcohol abuse.

Walsh said that minimum pricing in Scotch whisky's home market could undo 15 years of SWA work to dismatle tax and tariff discrimination in foreign markets. 

He said: "It is relatively easy to challenge a clear breach of World Trade Organisation obligations when the discrimination comes down to facts and figures. It is almost impossible to take action against protectionist foreign governments when the issue becomes one of public health and you are required to prove that the measure is neither proportional nor necessary, both of which are much more subjective concepts."

He added: "A Scottish precedent in our home market would damage us immensely."

The SWA said last week that Scotch exports rose by 8% in value in 2008 to break the GBP3bn (US$4.5bn) barrier for the first time. Exports by volume fell by 5%, due to economic decline in some key markets, such as Spain and the US.

Walsh called the rise in exports by value "truly impressive", given the current economic climate.

He said that confidence in the industry remains strong and that more than GBP800m of capital has been invested in the industry between 2007 and 2010.

"We may hold back a little this year on new investment as we see how economies recover and the world market develops. But, I take courage from the fact that nobody seems to going back on investment that has already been given the go-ahead."


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