Scotch whisky chief warns "Yes" vote may be "damaging" for industry

By Erin Smith

Published: 13 May, 2014

Despite "unprecedented" investment in the Scotch whisky industry expected over next two years, the Scotch Whisky Association chief executive David Frost warns that voting for an independent Scotland could bring risks that "would be damaging and difficult manage."

In the SWA's Annual Review report, Frost lays out some of the investments that will be made to continue to continue to grow the industry as well as the biggest challenge facing the industry this year, primarily the impacts of the Scottish independence vote set to take place in September.

Frost said: "The implications are huge. 35,000 jobs depend on the industry."

Frost has concerns that an independent vote could potentially impact on Scotland's European Union membership status. He said, "At the EU level, the legal framework provided by EU membership is fundamental. The 'Scotch Whisky' geographical indication is protected in EU law. We are able to export tariff-free across the single market, use EU mechanisms to eliminate market access problems and benefit from the EU's clout in trade negotiations. Even a temporary interruption of EU membership involving exclusion from the single market or the customs union, if this were a consequence of independence would be damaging and difficult to manage."

Additionally, Frost had concerns about the implication an independent vote could have on the industry even within the UK. "At the UK level, we are fortunate to have - on the whole - certainty in our domestic business environment. We benefit from the fact that our domestic market is the sixth biggest economy in the world. In contrast, as of now, the nature of an independent Scotland's currency remains unclear, and self-evidently this could affect our exports, management of supply chains, pricing, and competitiveness," said Frost.

Frost emphasises the importance of diligently looking at the potential economic impacts an independent vote could have on the Scotch whisky industry. He said: "As we consider the potential impact of constitutional change, we look for reassurance on how an independent Scotland could deliver a business, regulatory, and export environment at least as supportive as that which the industry currently enjoys."

The Scotch whisky industry has had record export sales in recent years and has helped create jobs, particularly in rural and remote areas. Over the next two years £2 billion is committed to being invested in the industry along with the planned opening of 20 new distilleries.

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