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ASIA: Scotch whisky gets S Korea, India boost

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Scotch whisky exports to Asia are expected to benefit from new trade deals in two of the industry's most important emerging markets, South Korea and India.

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Scotch distillers are set to profit from the European Union's free trade agreement with South Korea, which comes into forced today (1 July). The agreement will see South Korea eliminate a 20% tariff on imported spirits and recognises Scotch whisky's geographical indication of origin (GI) status.

Separately, Scotch whisky will, for the first time, receive GI status in India, the Scotch Whisky Association said. The deal enhances distillers' legal protection against copycay whisky by recognising that Scotch can only be made in Scotland.

Both South Korea and India are seen as strongly emerging markets for Scotch. South Korea is the industry's sixth largest export market by value, with shipments valued at GBP153m (US$245.8m) in 2010.

“Despite Korea already being a key market for Scotch, its performance over the years has been impeded by the high tariff and other trade barriers in a market where the domestic spirit, soju, has a 97% market share," said the Scotch Whisky Association's (SWA) deputy director,  Martin Bell.

India is a top ten export market by volume for Scotch Whisky, with 40.1m 70cl bottles shipped there in 2010, up 40% on 2009. In value terms, however, the market has proved more difficult. “India is one of our priority markets," said SWA CEO Gavin Hewitt.

"There is a huge demand for Scotch Whisky from discerning Indian consumers. It is important that they have confidence in the quality and integrity of what they are buying."

Despite the GI breakthrough in India, tariff barriers in different states continue to impede growth in the country, according to the SWA.

To view a just-drinks data graphic on Scotch whisky exports worldwide, click here.


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