SCOTTISH WHISKY MARKET ANALYSIS

The significant taxes imposed by various governments around the world are posing considerable challenges for the growth of the global Scottish whisky market. High taxation has made Scottish whisky quite expensive in several international markets, thereby restricting its mass consumption. With overall beverage alcohol consumption rising globally in recent years, the Scottish whisky industry is unable to capture this growth fully and scale up its operations at a more rapid pace. Additionally, The high cost of Scottish whisky consequent to disproportionate taxation is also compelling distillers to cut costs drastically and compromise on quality standards to maintain profitability. This eventually affects the premium brand image and heritage value attached with prestigious whisky names from Scotland. While governments aim to curb harmful drinking through taxes, excessively high duties beyond a reasonability threshold tend to promote counterfeiting and smuggling rather than moderate consumption behavior. Overall, exorbitant whisky taxation by multiple governments in import markets across continents like Asia, Africa, North America and Europe is restricting the global growth trajectory of the revered Scottish spirits industry in the long run, despite rising global interest in premium alcohol beverages.

Market Opportunities: Growth of emerging markets like Asia Pacific and Latin America

The growth of emerging markets in Asia Pacific and Latin America regions provide significant opportunities for the global Scottish whisky market going forward. These regions have seen rapid economic development and rise of large middle class consumer bases in recent decades. Countries like India, China, Brazil and others have more than double digit GDP growth rates annually as per World Bank data from 2020-21. This directly translates to higher disposable incomes for common consumers in these markets. As people get more affluent, their spending on luxury and premium goods increases considerably. Scottish whisky, being a premium beverage associated with high social status, stands to greatly benefit from this change in consumption patterns of new middle class customers in Asia Pacific and Latin America.