Chinese whisky drinkers aid Scottish economy

Scotch Whisky as a Geographical Indication

By Brad Jones

Today, Vince Cable signed an agreement with China that will make sure that Scotch Whisky sold in China is sold according to UK rules. It is expected that this will increase sales of Scotch Whisky in China by tens of millions of pounds per year.

The ruling means that Scotch Whisky is registered as a Geographical Indication, meaning Chinese consumers will have more peace of mind, knowing that the whisky they are buying is authentic. China’s population of over 1.3 billion people contribute to a spirits market that brought in revenues of over $8 billion in 2008 and is estimated to reach revenues of over $11 billion by 2013.

This development is hoped to do its part to help Scotland’s economy, which was referred to as ‘broadly static’ in the latest Bank of Scotland PMI report. Donald MacRae, the Bank of Scotland Chief Economist described October as a ‘pause in recovery’ for the Scottish economy. The rapidly expanding market for Scotch Whisky in China is hoped to aid the recovery, growing from £1 million in 2001, to around £80 million in 2009, and this number is projected to increase by 100% over the course of the next five years, in part due to its new status as a registered Geographical Indication.

However, there are worries amongst whisky lovers in Scotland that this shift in focus to China will have a downside for local enthusiasts. Jed Dancer, a member of an Edinburgh Whisky Society raised his concerns that increased Chinese influence over whisky brands will result in higher prices for Scottish consumers. Mr. Dancer said ‘Distribution will vary. Less whisky here, and more whisky shipped over [to China] will result in inflation of whisky costs.’ However, Mr. Dancer did admit that the Chinese market was an ‘amazing business opportunity’ for the whisky industry.