By Scott Wright
SCOTCH whisky stalwart Billy Walker has hailed the impact which the shock suspension of US tariffs on single malt has had on exports to the US, as he outlined his excitement at the prospects for the growth of his Speyside distillery.
The industry veteran, who leads the GlenAllachie Distillery, declared that he is “embarrassed to say business is booming” after experiencing the combined tumult of the tariffs, coronavirus pandemic and Brexit.
Mr Walker, who acquired GlenAllachie with Trisha Savage and Graham Stevenson in 2017, uses the word “embarrassed” because he is aware recent months have been damaging for major parts of the drinks sector, such as hospitality and travel.
GlenAllachie, though, has emerged in a strong position, boosted by the easing of tariffs and Brexit concerns. It has also benefited from a change in consumer behaviour that has seen whisky enthusiasts spend more on special bottlings while other avenues for expenditure like holidays and eating out have been closed.
Import tariffs were added by the Trump administration to single malt and other Scottish goods such as cashmere in October 2017 as part of a long-running trade dispute between the US and European Union over aircraft subsidies. The Scotch Whisky Association estimates that the policy cost the industry more than £500 million in lost exports, however there was a surprise breakthrough in March, when the tax was suspended.
Mr Walker said the change in US administration following Democrat Joe Biden’s defeat of Trump has “unquestionably” contributed to the change in policy.
The tariff was suspended in March following the appointment of Katherine Tai as US Trade Representative, a Biden pick, lifting hopes among those eager to see Washington pursue a less protectionist stance than Trump.
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Asked if GlenAllachie has seen a benefit from the tariff suspension, Mr Walker said: “Yes, absolutely. The presence of tariffs had made our engagement with the market quite difficult because it meant we were seeding in at a much higher rate than perhaps some other companies who had managed to get products in in advance of tariffs.
“I have to say, the change in administration in the States has unquestionably been helpful. I also have to say 10 out 10 to whoever was working in the Westminster, and indeed in the Scotch Whisky Association, for this happening, and happening really quite out of the blue.
“The hope is indeed that it is not a temporary lifting of the tariffs [and] that it is there for the long term. I have feeling, and I hope, that is exactly how it will play out. For us it has been a big, big plus because we have seen a significant uplift in the activity that we are doing in the United States.”
Elsewhere on the exports front, Mr Walker highlighted a “quite significant recovery” in Asia. He said this can be seen in China, Taiwan and South Korea, where there is now “significant interest” in single malt which has been building for some time. “That is translating into sales and shipments,” he said.
Mr Walker said the pandemic has changed the “pattern of consumer behaviour, at least in the short term.”
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Highlighting the role social media channels can play in taking brands to new audiences, he said: “Is that a long-term thing? I am not sure.
“At least this period has given our brands a fantastic opportunity to showcase into a consumer base that is very curious and influential in the journey forward.”
He added: “We feel blessed, because it could have been a lot worse.”
GlenAllachie is in the midst of a busy programme of product development. In May, it debuted a 30-year-old whisky, its “oldest and most prestigious” GlenAllachie malt yet, while forthcoming activity will see it bottle the first releases under its MacNair’s rum range in the next couple of weeks. Its MacNair’s peated malt range will also be rebranded.
Mr Walker, who reports that demand has also been strong for GlenAllachie White Heather 21-year-old blended Scotch, remains passionate about the industry. He said: “We are not standing still. There is a broad spectrum of people, both in-house here in marketing and sales and all the support activities, and up at the distillery who are doing the most fantastic job. I have to say I have been in this game for 50 years and I have never been as excited as I am just now in terms of where we are going.”
On Brexit, Mr Walker said the distillery now finds it “seamless and smooth” to sell into Europe. “The only kind of problem is trying to get consolidated small loads into places like Romania and Bulgaria,” he said. “It is not the fault of market arrangements – it is more do to with getting transport that can actually accommodate consolidated loads.”
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