Hop Scotch

By: | Issue #649 | at 08:00 AM | Channel(s): International Trade  

Shipped to 182 different countries Scotch whiskey is one of the world’s most diverse exports

Scotch whisky travels well. It was exported from Scotland to 182 different countries last year, according to the Scotch Whisky Association. Bottled, blended whisky – which mixes different types of barrel-aged, malt whiskies together with grain spirits—is, by far, the biggest seller. These bottles, including such well-known brands as Johnnie Walker, Dewar’s, Vat 69 and J&B, accounted for almost 70% of the £4 billion (US $5.16 billion) worth of exports last year. Single-malt bottles added another £1 billion (US $1.29 billion).
Then there are bulk whisky exports, a little-known part of the trade, but one that is critical to tipplers in many countries. Bulk whisky contributed £200 million (US $258 million) to 2106 export totals.

One of the leaders in the field is Ian Macleod Distillers, perhaps best known for its Glengoyne and Tamdhu brands of single-malt whisky. “Bulk whisky is a significant part, not a major part of our business,” said Gavin Durnin, bulk sales director of Ian Macleod.

Bulk whisky is shipped overseas from Ian Macleod and other distillers in 25,000 bulk liters, stainless steel ISO tanks. The 20-foot tanks are framed to achieve the same shape and size of a 20-foot container. Paltank and Stolt Tank Containers make these tanks.

Bulk whisky can be grain alcohol, but the vast majority is blended malt, explained Durnin. The biggest single market for Scotch bulk blended whisky is France, Durnin said. That stands to reason. In per capita terms, the French are the world’s leading consumers of whisky, and France, itself, now boasts of 42 distillers, most of which blend.

Tale of Two Markets: Brazil & India

Durnin cited two other markets as illustrative: Brazil and India.

In Brazil, the number one selling brand of Scotch is Teacher’s Highland Cream blended whisky. It’s shipped in bulk from Scotland and – with water added—bottled in Brazil. That saves consumers mammoth import taxes. It also saves the distiller money in shipment costs. Bulk whisky contains 65% alcohol. The bottled variety contains 40% alcohol. Water in Brazil is cheap. So is the glass used to make the bottles.

India is by far the biggest consumer of what is called whisky, although that’s a bit of a misnomer. Indians drink more than 1.5 billion liters annually, according to Euromonitor, more than three times American consumption. But just a fraction of what they drink – less than 1% according to the Scotch Whisky Association – is actually Scotch. Sky-high duties of 150% serve to put a damper on that market.

Indian domestic whisky is called “Indian made foreign liquor,” which distinguishes it from native hard liquor such as toddy. Most of it is molasses-based, so it’s really rum. Teacher’s and 100 Pipers bottle in India, shipping in bulk whisky, and adding water. And some Indian distillers use grain whisky, shipped in bulk from Scotland, as an additive to their local concoction, carrying such Scotch sounding names as Royal Stag, Bagpiper, Imperial Blue and Officer’s Choice.

Durnin, for one, believes the global market in bulk whisky will shrink in the next decade or so as demand for “better quality products” – namely single malt and higher priced blends—gain traction in countries around the world. “A lot has to do with demographics” he said. “As we get older, habits change.”

American Journal of Transportation