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Emerging markets help boost Scotch exports

Workers walk near some of the copper stills in the Roseisle distillery in Moray, northern Scotland, in this March 1, 2011 file photo.

DAVID MOIR/David Moir/Reuters

Andrew Bolger is the FT's Scotland correspondent

A spectacular increase in demand for Scotch whisky from Asia and Latin America helped the industry's exports to defy global economic uncertainty in the first six months of this year.

Global shipments of Scotch between January and June reached £1.8-billion ($2.86-billion U.S.), up 22 per cent on the £1.47-billion achieved in the first half of last year, according to figures released by the Scotch Whisky Association.

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The U.S. remains the top export market by value for Scotch with shipments up 14 per cent to £268-million. France, the second most valuable market, rose by 13 per cent to £220-million.

But emerging markets are becoming increasingly important to Scotch producers. Shipments to Central and South America reached £214-million, a 49 per cent jump on the same period last year. Sales to Brazil rose by 56 per cent to £45-million.

The export figures were welcomed as "absolutely phenomenal" by Richard Lochhead, Scotland's rural affairs secretary.

"Our whisky sector is an international success story and more and more discerning drinkers around the world are enjoying a dram and a little bit of Scotland," he said.

Exports to Asia increased by 33 per cent to £423-million. Taiwan is now a top five market for Scotch, with shipments growing to £70-million from £48-million.

China ranks only 14th in the industry's league table of sales by value, at £31-million. But much of the Scotch consumed in China goes through the trading hub of Singapore, where the value of sales increased by 64 per cent to £149-million.

The volume of shipments grew in line with increased value. The equivalent of about 569 million bottles were exported in the first six months, an increase of 19 per cent to the end of June.

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Over the whole year -- from July 2010 to June 2011 -- volume was up almost 5 per cent. The SWA said this reflected the slowdown at the end of last year due to economic uncertainty, followed by a growth in confidence among producers bolstered by increased demand from emerging markets.

Gavin Hewitt, chief executive of the SWA, said that while traditional export markets remained important, the industry was advancing in other regions and consumer confidence was strong.

"Recent breakthroughs in trade relations will help further," he said. "A free-trade agreement with South Korea and better legal protection for Scotch whisky in India and Turkey give optimism for further growth. India and Turkey are now among the countries which recognize Scotch as a product that can only be made in Scotland."

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