Scotch whisky and Kentucky bourbon, two iconic spirits, have made significant contributions to their respective economies. In the UK, the Scotch whisky industry brought £7.1 billion into the economy in 2022, marking a 29% increase in gross value added (GVA) since 2018. Scotland alone benefits from £5.3 billion of this value, accounting for approximately 3% of the country's total GVA. The industry also supports 66,000 jobs across the UK, including 41,000 in Scotland. Additionally, Scotch whisky makes up 77% of Scotland's food and drink exports and 26% of the UK's overall exports [dff31e0e].
Meanwhile, in Kentucky, the bourbon industry has also experienced significant growth. A recent economic impact report reveals that the industry now generates $9 billion in total economic impact. This growth can be attributed to a decade of legislative changes that have resulted in more jobs, increased payroll, higher tax revenue, more tourists, and more distilleries. Kentucky distillers shipped over $500 million in exports in 2022, making bourbon a significant contributor to the state's economy. Distillers also pay $358 million in state and local taxes annually, further benefiting the state [c1178c73].
Both the Scotch whisky and Kentucky bourbon industries play crucial roles in their respective economies, supporting jobs, generating revenue, and contributing to exports. The success of these industries highlights the importance of government support and investment to maintain their positive trajectories. As the Scotch Whisky Association (SWA) has called for continued government support and investment in the Scotch whisky industry, the leaders of the Kentucky Distillers' Association have also recognized the impact of legislative changes on the bourbon industry. These reports demonstrate the economic significance of these spirits and the industries that produce them, solidifying their positions as valuable assets in their respective countries' economies.
However, the Scotch whisky industry now faces potential tariffs in the US. Scotch whisky bosses have urged US politicians to protect the industry from the reintroduction of brutal tariffs. The industry fears that tariffs could be reintroduced on Scotch whisky after the US election. The tax, brought in by Donald Trump, caused Scotland's distilleries to report a loss of roughly a million pounds a day. The tariffs were suspended in 2021 but are set to end in June 2026. Representatives from the Scotch Whisky Association met with members of Congress to discuss the suspension and called for the industry to be removed from harm. The US market is hugely important to the sector, with an export value of £978m in 2023 [0fd2a6dc].
In light of these potential tariffs, strengthening Scotland's links with the US could be crucial for the country's economic growth. An opinion piece by Chris Deerin highlights the economic benefits that Scotland could gain from enhancing its connections with the US, particularly with its Scottish diaspora. Deerin points out that there are an estimated 25 million people in America of Scottish descent, around five times the population of Scotland itself. He also notes that US assets in Ireland amount to $2 trillion, over four times the value of US assets in China. Research and development spending in Ireland by US affiliates reached $4 billion in 2020, with these companies employing more than 200,000 people. Deerin suggests that Scotland could adopt a more dynamic, private sector-driven approach similar to Ireland's to attract US investment and boost the Scottish economy. Strengthening ties with the Scottish diaspora and focusing on business and innovation could create more opportunities for growth and prosperity [49d904a8].