Arran could be badly hit by tariffs wars

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News that the United States plans to slap tariffs of 25 per cent on imports of Scottish malt whisky later this month as part of its dispute with the EU over subsidies for airliners has been met with concern and disappointment on Arran.

The news, which could have far reaching implications for distilleries across the country, has the potential, if realised, to wreak havoc across the industry and could also have serious repercussions for the Arran Distillery in Lochranza.

Euan Mitchell of the Isle of Arran Distillers said: ‘It is a sad indictment of the state of global politics that Single Malt Scotch whisky should be dragged into a dispute originating in the aerospace industry.

‘Trade wars ultimately benefit nobody and we can only hope this is a short-term hit and that common sense will prevail.

‘The US is the world’s largest and most lucrative spirits market but also the most competitive and this tariff will hit all Scotch Whisky companies, big and small, involved in the single malt category.’

Highlands and Islands Conservative MSP Donald Cameron said he is ‘alarmed’ that such trade dispute could hit communities in places such as Islay very hard.

‘It’s a bitter irony that an argument between the European Union and the United States about subsidies for airliners should embroil the malt whisky industry,’ he said.

‘EU trade negotiators need to get back into talks with their American counterparts and sort this dispute out before it does any more harm.’

And Lochaber and Skye SNP MSP Kate Forbes added: ‘This is, of course, worrying news for the whisky industry, which has several distilleries in my constituency. It could have a long-term impact on investment and jobs.

‘A lot of these jobs indirectly support the rural economy, and the US is the whisky industry’s biggest market.

‘It was raised with the First Minister last week at First Minister’s Questions and it is in everybody’s interests to negotiate a settlement.

‘This gives us a sense of what might happen to the wider food and drink industry in the event of a no-deal Brexit.’

Frazer Coupland, CEO of Lochaber Chamber of Commerce, called the news of the tariffs disappointing and added: ‘Businesses that export already face many challenges and uncertainty, and this kind of sudden change to exporting rules can only add to the burden on businesses.

‘We will work to support our members affected by this change to trading conditions through  the wider Scottish Chambers of Commerce network.’

However, of the three whisky distilleries in Lochaber, one does not export to the US and one of the other two is still a year away from selling whisky.

The third local Lochaber distillery – on Ardnamurchan – and two other distilleries – Talisker on Skye and another on Raasay – did not reply to our request for a comment.

Annabel Thomas, founder and CEO of the fledgling Nc’Nean Distillery on Morvern, interrupted her business trip to a trade show in Berlin to give her views on the tariff bombshell.

Nc’Nean Distillery was founded at Drimnin near Lochaline in 2012 and is only at the stage of producing botanical spirit with its first batch of whisky not due until next year.

Ms Thomas said the US tariffs announcement meant her distillery’s plans to target the American export market next year will have to be put on hold if the trade dispute is not resolved quickly.

‘The US has always been a target market for us but if these tariffs do go ahead then that potentially makes that market a bit less attractive,’ she told us.

‘The plan had been to move into the US market and from there on to Canada but it might be the case we look at Canada first. If the tariffs make our whisky prohibitively expensive, that makes it less attractive.

‘So it is disappointing, but there are plenty of other markets for whisky. For smaller businesses like ours, there is more flexibility than say larger distillery businesses that are already committed to the American market.

‘At the moment, it is the uncertainty around this because it could all change again very quickly.’

Asked to comment, Colin Ross, retired managing director of Ben Nevis Distillery in Fort William, said: ‘We are very lucky in that currently we do not export our whiskies into the United States.

‘Obviously, we have done in the past but the bulk of our export business is with European and Far Eastern countries.’

But Karen Betts, chief executive of the Scotch Whisky Association, added: ‘This is a blow to the Scotch whisky industry. The tariff will undoubtedly damage the Scotch whisky sector. The US is our largest and most valuable single market, and over £1 billion of Scotch whisky was exported there last year.

‘The tariff will put our competitiveness and Scotch whisky’s market share at risk. We are also concerned it will disproportionately impact smaller producers. We expect to see a negative impact on investment and job creation in Scotland, and longer term impacts on productivity and growth across the industry and our supply chain.’

 

Lochranza Distillery could be one of many distilleries in Scotland affected by a potential tariff increase if a dispute between the EU and the United States is not resolved.No_B42whisky01