Brexit could effect Scotland’s famous whisky industry

The Scotch Whisky Experience houses the biggest whisky collection of the world.

The Scotch Whisky Experience houses the biggest whisky collection of the world.

Scotch whisky is one of Scotland’s biggest prides. With 4.3 billion pounds exported annually, it is also one of the biggest export products of the United Kingdom, which makes its industry incredibly important. But a threat looms over this blooming industry: Brexit.

Strolling down the Royal Mile in Edinburgh, the mile long street in the city centre between Edinburgh Castle and Holyrood Palace, you quickly lose count of the amount of whisky shops. Not only are the shops plenty represented, but so are the whisky bars trying to lure you in to try the real Scotch whisky. The spirit drink has a global reputation and is well known even outside the borders of Scotland.

That is why a lot of tourists that visit Edinburgh find themselves tempted to try the whisky, to buy a lot of bottles to take home, or even book daytrips to Scottish distilleries. None can be found in the city of Edinburgh, but a lot of them are nearby. Those who like a more educational experience can visit The Scotch Whisky Experience, also based on the Royal Mile.

The Scotch Whisky Experience is a great place to get to know whisky, although whisky lovers will probably feel like they are in heaven as well. A barrel ride takes the visitor on a trip through the process of making the whisky. Afterwards, one of the guides tells more about the different whiskies that are made in the different areas and you get to choose which whisky you want to try. Then, mouths will drop while entering a room containing the biggest whisky collection in the world, and some mouths will water when finally having a sip of the high quality whisky. Despite your liking (or non-liking) of the taste, most people will probably enjoy their visit anyway. The attraction is immensely popular, doing tours every twenty minutes and on busy days even every ten minutes.

The industry is clearly doing well, but an important event takes place next month that might change all that. The United Kingdom (UK) will have a referendum on whether to remain member of the European Union (EU) on the June 23, 2016. All British citizens that are over 18 years old can cast their vote. And Brexit, as the UK leaving the EU is called, might have a massive impact on the whisky industry.

The Scotch Whisky Assocation (SWA), based in Edinburgh, has voiced their concern on the matter. Chief Executive David Frost believes that British membership in the EU is in the Scotch whisky industry’s best interest. “Only someone rash would try and predict how this referendum will turn out, but we hope that staying in the EU will be the end result. For us, the European Union is very important.”

To get an idea of how big the market is: every second, 34 bottles of Scotch whisky are shipped overseas. That means that 125 pounds per second are earned. More than 10,000 people are directly employed in the Scotch whisky industry and over 40,000 jobs across the UK are supported by the industry. In 2013 exports of Scotch whisky stood at 4.3 billion pounds, because of that it accounts for 80% of Scottish food and drink exports and 25% of all the food and drink exports of the UK.

A visit to The Scotch Whisky Experience in Edinburgh is not complete without a tasting.

Different bottles of the amber liquid are on display at the Scotch Whisky Association.

But what could possibly do harm to such a big and stable industry? The association is afraid that free trade agreements will fall apart. They think the EU’s single market, including its regulation of food and drink, and its single trade policy, are central to Scotch whisky’s success. “The single market lets us trade across the EU simply and easily.” The single market means that the EU is one territory without any internal borders or other regulatory obstacles to the free movement of goods and services.

“I don’t see how we can be part of EU trade agreements when we are not in the EU anymore”, says Frost. “Those agreements often give us preferential tariffs. The UK could of course negotiate own trade agreements, but that will take time. And will the agreements be as good? Probably not.”

Frost does express that the SWA doesn’t think Brexit will mean a catastrophe. “We are not saying disaster, but exporting and making money will be much more difficult. If you suddenly have to pay tariffs when you didn’t before, or have to fill in many forms, that is all part of the costs.” Frost finds it hard to predict the added costs or how export numbers might change.

But Brexit will obviously influence the industry, even though the immediate effects are hard to tell at this point. It is unlikely that walking along the Royal Mile will be any different in a couple of years time, or that the tourists will notice any changes in the industry. Because right now the magnitude of the industry is clearly visible in the streets of Edinburgh, despite there being no actual distilleries in the city.

Ronnie Berri knows all about that. He is a tour guide and organizes Scotch whisky tours all around the country, taking tourists to distilleries or tastings, sometimes even for trips that take multiple days. Along with that, Ronnie is a member of the Keeper of the Quaich, an exclusive and international society that recognises those that have shown outstanding commitment to the Scotch whisky industry. One might call him an expert, but Ronnie himself modestly says that he is first and foremost just a tourist guide. “What I do is about people. I love people. I love passing on my knowledge.”

During his tours Ronnie takes his groups to different areas where Scotch whisky is made. For short trips that area is usually Speyside, because most distilleries are based there. Distilleries are visited and Ronnie shares his knowledge on the aspects of whisky production and the industry. On longer trips, multiple distilleries are visited. And of course there are plenty of whisky tastings, sometimes even from his own collection. “My own collection consists out of 300 bottles. But I have no favourites. Each distillery and whisky is unique and we should appreciate that.”

A visit to The Scotch Whisky Experience in Edinburgh is not complete without a tasting.

A visit to The Scotch Whisky Experience in Edinburgh is not complete without a tasting.

The nearest distillery to Edinburgh is 40 minutes away, although plans are being made to build a distillery in the city. “Building that will take time though. Whisky needs to mature. It needs three years before you can call it whisky.” The initiator of the new distillery didn’t want to comment on Brexit or how it might influence his plans.

Still, Ronnie believes that the streets of Edinburgh are a great place to start exploring the world of whisky. “Edinburgh is a city that is ideal for weekend breaks. Even if you don’t have the time to visit distilleries, everything is around you here. The Scotch Whisky Experience is a great introduction.” A lot of people that don’t have time to go to the countryside visit places related to whisky in the city, such as the attraction, but also the bars or stores. “And I know that a lot of people have enough interaction with whisky here to make them decide they want to come back later for an extended trip.”

Ronnie believes the industry is very important. “Scotch whisky is vital to Scottish culture”, he says. “It is such an essential Scottish thing. Anyone can make whisky around the world, it’s not a secret. But no one can make Scotch whisky. The name and reputation that this whisky has makes sure that people come to Scotland for this from all around the world.”

David Frost wholeheartedly agrees with that: “The name Scotch whisky already says it. It is part of the identity. A lot of people know Scotland through the whisky.”

And that is something that will probably not change in the immediate future, although behind the scenes there might be difficult times ahead for whisky distillers.