Scotch distillers not afraid to credit EU with a measure of their global success

Last year, the Tobermory distillery on the Isle of Mull in the Hebrides had to cease production after the island had a fifth of its normal rainfall. Meanwhile, much of the rest of Britain endured its wettest summer for the best part of a century. Life up north can be different.

The distillery has been operating since 1798, so the temporary closure did nothing to interrupt supplies of its Tobermory and Ledaig single malts.

Like other Scotch distillers, Tobermory has benefited from the phenomenal popularity enjoyed by Scotch whisky internationally, with total exports now worth nearly £5 billion, up by an eighth in just 12 months.

In April, the Mull distillery was bought by the South African company, Distel, a move which follows the £60 million purchase last September by Rémy Cointreau of the Bruichladdich Distillery Company on neighbouring Islay.

Besides their own hard work and dedication, Scotch distillers have benefited greatly from Britain’s European Union membership. Unlike other British industries, they display no reluctance in making their support for it known. Some months ago, the industry’s mouthpiece, the Scotch Whisky Association, lodged a submission to the British government’s inquiry into the powers that should be repatriated from Brussels.

Scotch whisky, under EU rules, can only be distilled in Scotland from fermented malted cereals, matured in wooden casks for three years or more and cannot be sweetened, or flavoured.

In addition, the EU has gone to bat for Scotch distillers, taking cases successfully to the World Trade Organisation when the latter faced unfair discrimination in Japan, Korea, Chile and the Philippines.

'Great benefits'
"We have seen great benefits from the EU's economic power and we don't see any reason for that to change. We're not asking for anything to be repatriated," Campbell Evans of the Scotch Whisky Association told The Irish Times.

On August 1st, the latest in a series of free-trade rules negotiated by the EU came into force, opening up Colombia, while a number of association agreements with Honduras, Nicaragua and Panama will ease the route to the shelves.

Last year, more than £500 million worth of whisky cases were sold to Central and South America, up 3 per cent on the year before, but the association insists that, with Scotch holding “a relatively small part of the spirits market in these countries, there is great potential for growth”.

In its submission to Whitehall, it declared: “As the world’s foremost internationally traded spirit drink, Scotch whisky derives enormous benefit from the EU’s expertise and negotiating muscle in the areas of trade policy and market access globally.”

In addition, the union offers the industry a 28-state internal market that has developed greatly since the 1970s, when Scotch was sold in over 60 bottle sizes.

“The new rules were hugely beneficial in rationalising bottle variants, reducing consumer confusion and improving bottling machinery efficiency. The use of lightweight glass became possible, thereby providing huge environmental advantages,” the submission went on.

Barriers to trade ended. The European Court of Justice ruled that excise tax, VAT and additional regulations in Denmark, France, Greece, Ireland and Italy were illegal, while copycat whiskies in France were banned.

An EU-wide excise system “largely works smoothly” in tracking the shipment of such goods throughout the EU, while the internal rules set down by Brussels are useful outside the union because third party countries are often urged to copy them.

In recent months much attention has been paid to the prospects of a free-trade deal between the EU and the United States, though Scotch distillers are more interested in India.

“India has a tariff barrier of 150 per cent against Scotch,” said Mr Evans. “It is one of the largest, if not the largest spirits markets in the world, 250 million cases sold, and Scotch has less than 2 million cases of that. Our priority is to get that deal done.

“We already have an agreement with the US in both directions. The Indian talks have been long-running. There is potential for further talks this summer. We’ll probably know by the autumn whether a deal can be done by the Indian elections next year, or not.”

Scotch whisky has reached its international heights of success due to skill, but also thanks to some good fortune. In the 19th century, Irish whiskey was seen as superior, but Irish distillers lost out in the British market after independence, particularly from the 1930s onwards.

Shifting sands
The lesson has left Scotch distillers conscious that shifting international sands can cost dearly: "There are probably technical things (that could be done better at EU level), but I can't immediately say," comments Mr Evans.

Back on Mull, Loch Ba is said to be the home to the Celtic giant, Cailleach Bheur, who renewed her youth once every hundred years by immersing herself in its waters, but only if she performed the rite before any creature woke.

For millennia, the years “fell away and she became a young girl once again”, until the day when a restless shepherd’s dog began to bark as she made her way to the water. The spell was broken. Scotch distillers know that their spell, too, is not guaranteed.