The Scotch whisky industry is “strategically important” to the nation, playing a crucial role in rural and remote economies and contributing billions of pounds overall to output, experts observe.

The industry, a major exporter in a Scottish and UK-wide context, is particularly important to many rural and island communities in which it makes up a much larger part of the economy than nationally and provides crucial employment.

As well as growing much larger this millennium as a result of Scotch’s surge in export markets, Scotland’s alcoholic drinks sector has also been augmented in recent years by the arrival of a raft of new distilleries making gin, vodka and rum, and by craft beer producers.

However, the alcoholic drinks sector remains dominated by Scotch whisky. There has also been a raft of new Scotch whisky distillery openings in recent times.

Isle of Harris Distillers noted last August it had by then built its workforce to 45 - double what it promised - and this number gives an idea of just how great a difference it has made to the labour market of the fragile island economy. This workforce was built as the distillery produced gin, which has enabled revenue to be brought in as The Hearach, the Isle of Harris single malt Scotch whisky which went on sale last year, has matured.

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Mairi Spowage, director of the University of Strathclyde’s highly regarded Fraser of Allander Institute, told The Herald: “The manufacturing of the alcoholic beverages industry, including spirits of all kinds and beer, makes up around 1.7% of the Scottish economy. Of course, the industry makes up a larger proportion of the economy in many rural areas of Scotland, particularly in the Highlands and Islands, Moray and Aberdeenshire.

“This industry is more important in terms of our exports, making up 16% of our international sales to the rest of the world. The volume and value of exports was of course disrupted by the pandemic, but in the latest data, [for the] year to Q3 2023, the exports of beverages from Scotland has a value of £5.5 billion.”

The Scotch Whisky Association (SWA), in a report published in January in which it describes the Scotch industry as “an anchor for economic growth”, calculates that the sector accounts for 3% of Scotland’s economic output annually, contributing £5.3 billion each year and supporting around 41,000 jobs north of the Border. The SWA figures encompass the industry’s contribution to economic output directly through the manufacturing process and indirectly through its supply chain and also includes “induced” gross value added. The induced element measures the effect on the economy of increased compensation of employees being re-spent on goods and services.

Graeme Littlejohn, director of strategy at the SWA, told The Herald: “Scotch whisky is a strategically important sector for Scotland’s economy. The figures bear this out - a recent economic analysis showed that Scotch whisky contributes more than £5.3bn to the Scottish economy, supporting more than 40,000 jobs, many of which are based in rural communities in the Highlands and Islands. Scotch whisky accounts for 3% of Scotland’s total economic output annually, and the growth of the industry’s exports means more investment, employment and growth across Scotland.”

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He added: “The industry may be over 500 years in the making, but the Scotch whisky industry is always looking forward. There remain huge opportunities for our industry to deepen its economic contribution in the years ahead if, by working in partnership with government, the landscape is set to support future growth.”

In its January report, which covers the Scotch whisky industry’s economic impact in 2022, the SWA highlights the sector’s growth on the gross value added measure of economic output. The industry body also underlines a surge during the last decade in the employment the sector supports.

SWA chief executive Mark Kent says in the report: “The numbers are impressive - a 29% increase in GVA since 2018 when we last took a snapshot of the industry's economic footprint, 24,000 more jobs supported across the UK than a decade ago, billions of investment in future growth.”

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He adds: From rural and island communities to our urban centres, Scotch whisky is an anchor for economic growth. Through turbulent times - past, present and to follow - with the right support from government it can continue to be for generations to come.”

Figures published by the SWA in February show Scotch whisky exports in 2023 totalled £5.6bn, down 9.5% on the prior year. However, the 2023 exports number was up by 14% on 2019, the year that preceded the coronavirus pandemic.

Setting out the industry’s economic impact in its January report, the SWA highlights the fact that the bulk of the sector’s contribution to Scotland’s overall output comes from production.

It says: “In 2022, the Scotch whisky industry, defined as the production and sales and distribution of Scotch whisky, generated £7.1 billion gross value added (direct and indirect and induced) in the UK. Out of this total, £5.3 billion was generated in Scotland.

“The industry supported 66,000 jobs across the UK and 41,000 in Scotland. The manufacturing of Scotch whisky is highly productive and generated £6.3 billion GVA across the economy, of which £3.4 billion was directly generated by production.”