David Martin MEP

Labour Member of the European Parliament and one of the six MEPs representing Scotland in Brussels and Strasbourg

Scotch Whisky offers spirited defence of EU membership


Scotch_Whisky.jpgWhen non-Scots think of our country one of the first things that springs to mind is our world-famous whisky. Enjoyed the world over, it is an emblem of Scottish culture that stands for high quality local production with a technique honed over centuries.

Sales of the warming amber liquid generate £4bn of exports annually, whilst exports have quadrupled over the last decade, making it a genuine British trade success story. It also represents 10% of all Scottish exports to the EU, which explains why the Scotch Whisky Association has come out so strongly in favour of the UK remaining a member of the European Union:
"The EU's single market, including its regulation of food and drink, and its single trade policy, are central to Scotch Whisky's success."

Over ten thousand people are directly employed by the Scotch Whisky industry in Scotland, and it supports 40,000 jobs in total across the UK - in sales, distribution and marketing. In total, it adds around £5bn in value to the UK economy. In their meeting with Environment Minister Liz Truss, distillery bosses told her that all this is put at risk if the UK should decide to leave the European Union on June 23.

Being part of the EU helps sales of Scotch in two significant ways.

The first is through the mutual regulations agreed at EU level, which mean that the drink can be sold across the EU's 28 member states without tariffs and without the need for excess bureaucracy (on labelling etc).

A third of all exports go to the EU. Three of the top ten destinations for Scotch are EU countries. France alone imports £450 million worth of the stuff, outstripping sales of its own Cognac in supermarkets by ten to one.

Access to the single market is only part of the picture. Due to its economic might the EU has an excellent record of negotiating trade deals with third countries, opening up markets and reducing tariffs. According to the Scotch Whisky Association, "The EU's weight and expertise in international trade helps give us fair access to overseas markets."

They also contain 'geographical indications' rules that protection the names of key local products abroad from cheap imitations. This ensures that Scotch Whisky has to be produced in Scotland according to the age old tripartite recipe of water, yeast and cereals, guaranteeing high quality, as well as maintaining jobs back home.

Scotch Whisky has benefitted hugely from these agreements which have lowered tariffs on spirits. For example, since the signing of the free trade agreement with South Africa in 2000, sales have risen 150%. Likewise, exports of Scotch to Mexico have grown significantly since the trade deal with that country lowered tariffs to zero. The deal with South Korea in 2011 also fed the Asian country's growing demand for our signature drink - exports grew 70% between 2013 and 2014 alone.

Regulations at EU level make exporting within the EU easier and tax-free, as well as protecting Scotch from cheap imitations. Leaving the EU would mean losing our ability to shape these regulations to suit British businesses as well as at least two years of uncertainty as the UK negotiates its own deal with the EU. It is very unlikely that the UK will get such a good deal if it wants to 'pick and choose' certain aspects of the single market.

Further afield, the EU's size and experience negotiating balanced and fair trade deals means that new markets are consistently being opened that quality Scottish products can exploit. A Brexit would mean these tariff reductions lost overnight with Britain having to renegotiate all of the trade deals again at once and as a much smaller partner. As President Obama said when he visited, it is false to assume that Britain would somehow jump to the front of the queue in terms of other nations' priorities, too.

Even bilateral deals between nation states can take a long time to conclude, as evidenced by the nine years needed to reach a deal between Canada and South Korea. That could mean nine years of higher taxes for our exporters and the loss of jobs at home.

 

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