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Scotch Whisky Association have members of all the distilleries across the UK

However, comparing these products, each give a very distinctive note and texture to it. This highly differentiated products is the fundamental which lessen the effect of competition.

The high-end scotch market is segmented into five regions include highland, islay, speyside and lowland. As well as a special region called Campbeltown, and the distilleries there are closed.  Different brands are competing whiskies from the same region. As for dalmore, they face very little competition in their price range strong for smooth highland scotch.

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A 25% tariff has today been implemented on US imports of Single Malt Scotch Whisky and Liqueurs.  This is very bad news for our industry.  It means that Scotch Whisky is now paying for over 60% of the UK’s tariff bill

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"A 25% tariff has today been implemented on US imports of Single Malt Scotch Whisky and Liqueurs. This is very bad news for our industry. It means that Scotch Whisky is now paying for over 60% of the UK's tariff bill for the subsidies it provided to Airbus, eight times more than the next most valuable UK product on the tariff list. That Single Malts are being targeted is particularly damaging for smaller producers, who stand to be the hardest hit.

"Scotch Whisky has been imported tariff-free to the United States for the last 25 years. This move undermines decades of hard work and investment which has seen Scotch Whisky sales boom in the US. It will impact both our industry and its supply chain.

"We estimate that 25% tariff on Single Malt Scotch Whisky will see exports to the US drop by as much as 20% in the next 12 months, as Scotch Whisky will become less competitive in the US market. In time, consumer choice will diminish and Scotch Whisky companies will start to lose market share. In Scotland and throughout our UK supply chain, we expect to see a dropping-off in investment and productivity. Ultimately, jobs could be at risk.

"We expect the damage to our industry to mirror the damage caused to exports of American whiskies to Europe since the EU imposed a 25% tariff in July 2018. That tariff has done nothing other than damage an industry very similar to, and closely linked with, our own. Alongside American whiskey companies, we have called on the UK, US and EU governments for many months now to find a negotiated solution to the trade disputes that have given rise to these tit-for-tat tariffs, and to ensure that duty-free trade can resume between the UK and the US to the benefit of whisky producers, their employees, the communities we work in, and consumers everywhere.

"We now need the UK and Scottish governments to work together to ensure distillers can weather the storm. We want them to consider a range of support to the industry, including reducing the UK tax burden on Scotch Whisky in the Autumn Budget. This will provide an important lifeline while efforts continue to remove the tariffs.

"Despite multiple pressures on the UK government, including Brexit, this issue must not fade from the minds of Ministers. Scotch Whisky has long been a standout export success. This is now at risk if government strategy does not urgently use all the powers at its disposal to remove these damaging tariffs."
For further information please contact the SWA Press Office on (+44)131 222 9200 or email

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SWA calls for end to damaging trade war as 25% tariff to US comes into force

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"A 25% tariff has today been implemented on US imports of Single Malt Scotch Whisky and Liqueurs. This is very bad news for our industry. It means that Scotch Whisky is now paying for over 60% of the UK's tariff bill for the subsidies it provided to Airbus, eight times more than the next most valuable UK product on the tariff list.

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Scotch Whisky Association (SWA) regards sustainability as one of its priorities. The industry works collectively through its environmental strategy, launched in 2009, which includes a number of voluntary targets, for example on the use of non-fossil fuels. It was refreshed in 2016 and is currently under review to ensure it can continue to shape the industry’s sustainability ambitions.

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In most countries around the world if people are asked what they associate with Scotland, whisky is likely to be one of the most popular answers.

With more than 120 malt and grain distilleries, Scotland has the greatest concentration of whisky production in the world. Scotch whisky is the country's biggest export, worth a record £4.7 billion last year.

Whisky production is dependent on a clean natural environment and the Scotch Whisky Association (SWA) regards sustainability as one of its priorities. The industry works collectively through its environmental strategy, launched in 2009, which includes a number of voluntary targets, for example on the use of non-fossil fuels. It was refreshed in 2016 and is currently under review to ensure it can continue to shape the industry's sustainability ambitions.

A number of Scotch whisky distillers have been recognised in the VIBES - Scottish Environment Business Awards, which recognise sustainability across all industries. The awards, which are celebrating their 20th year, are run by the Scottish Environment Protection Agency (SEPA) in partnership with the Scottish Government, Energy Saving Trust, Highland & Islands Enterprise, Scottish Enterprise, Scottish Natural Heritage, Scottish Water and Zero Waste Scotland.

Previous VIBES winners include the Glenmorangie Company, which won the VIBES Hydro Nation Water Innovation catergory in 2017 for the Dornoch Environmental Enhancement Project (DEEP). Run in partnership with Heriot-Watt University and the Marine Conservation Society, this aims to restore native European oysters to the Dornoch Firth.
Glenmorangie
The Glenmorangie distillery in Tain is located on the edge of the Dornoch Firth, an area of water designated as a Special Area of Conservation. Billed as a project that will benefit nature, business and the community, its vision is to restore long-lost oyster reefs to the firth to enhance biodiversity. It acts in tandem with the distillery's anaerobic digestion (AD) plant.

The AD plant is purifying about 95 per cent of the waste water Glenmorangie distillery releases, with the remaining 5 per cent of the organic waste to be naturally cleaned by oysters.

Professor John Baxter, chairman of the Independent Restoration Advisory Panel for DEEP, says: "What is really novel about DEEP is the partnership element between science, policy and industry."

Dr Peter Nelson, operations director at Glenmorangie, explains that the inspiration for DEEP goes back several years to when the industry was starting to understand climate change. One of the concepts that emerged was an ambition to do something to enhance the environment of the Dornoch Firth. Glenmorangie teamed up with Dr Bill Sanderson, associate professor at Heriot-Watt's Institute of Life and Earth Sciences, and together they came up with DEEP.

Nelson explains: "Oysters are the kings of the filter. They are brilliant at taking out these organic materials we're putting in and turning them into an animal, shell and clean water."

To progress DEEP, Morag Garden, the SWA's head of sustainability and innovation, has been seconded to Glenmorangie as a project manager, which will also help ensure the whole industry can benefit from this initiative. By 2021, the ambition is to have 200,000 oysters in the firth as a result of DEEP, which means that Glenmorangie will have achieved zero impact on Dornoch Firth waste. In the long-term, when it reaches the target of four million oysters, the distillery will be net-carbon positive in the firth.

Nelson says that DEEP has wider social and economic benefits, such as giving a boost to the oyster supply chain, which is made up of small businesses. "If we can encourage the creation of sustainable jobs outside the whisky industry that's a big positive for us," he adds.
Diageo
The world's biggest producer of Scotch whisky, Diageo, with almost 30 malt distilleries, has set itself ambitious environmental targets for 2020. For example, its international supply centre at Leven in Fife - the biggest packaging site for the

group - has introduced a number of measures to encourage sustainability, and was highly commended in the 2017 VIBES Awards.

Diageo decided to implement a trade effluent system upgrade. It uses the latest equipment and technology, and a traffic-light alarm system has been installed to ensure that no liquid waste ever leaves the site. The system is backed up by further measures to protect the River Leven, and its work has been recognised as "best practice" by the relevant authorities.

Other environmental improvements at Leven include a lift and car-sharing scheme; an electric engineering van and charging point; investment in LED lighting to reduce CO2 emissions; and a manufacturing excellence improvement project that calculates the carbon dioxide savings.

Tessa Ward, environmental compliance manager for Diageo in Leven, says: "The site achieved zero waste in 2012, two years ahead of target."
Chivas
Another VIBES Award winner - and sponsor of the awards since 2003 - is Chivas Brothers, which produces well-known brands such as Glenlivet and Ballantine's. Ronald Daalmans, environmental sustainability manager with Chivas, explains that the business has put a lot of effort into energy efficiency - a focus when developing its newer distilleries, such as Dalmunach, which it opened in Speyside in 2015. The facility features the latest heat-recovery technology as part of the company's commitment to meet non-fossil fuel targets.

Chivas, along with other whisky producers in Speyside, has also invested in the natural gas network in the area, to tackle the issue of the distillers' reliance on fuel oil because of their relatively remote locations.

In another technological advance, it is looking at the feasibility of electric distilleries, and is investing in options for electrifying heat and using the hot water that comes from the stills.

Chivas is also investigating how it can use technology to be more responsible in its consumption of water, and the company takes a circular economy approach when it comes to by-products. Daalmans says: "Overall, the Scotch whisky industry is in a good place and it is unique in the way it works really well together but, nevertheless, challenges remain."

He goes on to explain that the annual VIBES Awards gives valuable recognition to achievements by companies from across the Scotch whisky supply chain and Chivas has been entered for the Best of VIBES category this year, which recognises past winners.

Looking at the supply chain, Glasgow-based Guala Closures, which manufactures closures and stoppers for the whisky industry, received a VIBES innovation award in 2016 for investment in its production line which led to a number of benefits, including reductions in energy, water and solvents.
Selected saluted for sustainability measures
Whisky is one of Scotland's highest achieving sectors in terms of environmental compliance, according to the the Scottish Environment Protection Agency (SEPA). The agency is launching a series of sector plans to help industries meet and go beyond environmental compliance and launched the first of these, for the Scotch whisky industry, in October 2018.

"We'll work positively with those who want to do the right thing by Scotland's environment, such as the Scotch whisky sector," says SEPA chief executive Terry A'Hearn.

"We've seen consistently high compliance for several years - demonstrating that high environmental performance and prosperity are mutually dependent."

SEPA's sector plans focus on achieving full compliance with Scotland's environment protection laws - and encouraging as many operators as possible to move beyond compliance - for example, by reducing water, energy and raw material use, cutting waste, and harnessing innovating to deliver business and environmental benefits.

This approach underpins 'One Planet Prosperity' - SEPA's regulatory strategy for tackling the

21st-century challenges facing Scotland's environment. "We only have one planet, but are currently using the resources of three," A'Hearn said. "Our Scotch Whisky Sector Plan sets out how we'll continue our firm focus on environmental sustainability and look for wider opportunities across the supply chain, including in cereal production, transport, bottle manufacturing and packaging.

"In this plan, we set out how we will help as many Scotch whisky operators as possible to move beyond minimum legal standards and create economic and social success for Scotland from environmental excellence."

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How Scotland's whisky firms are reducing their environmental footprint

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In most countries around the world if people are asked what they associate with Scotland, whisky is likely to be one of the most popular answers. With more than 120 malt and grain distilleries, Scotland has the greatest concentration of whisky production in the world.

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“Reform of alcohol duty has been a long term goal of the Scotch Whisky industry and is our number one ask of all political parties in the General Election

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Read the SWA response to the recent announcement of a review into the UK alcohol duty system.

Commenting on the Conservative manifesto commitment to review UK alcohol taxation, announced by the Prime Minister in Speyside, SWA Chief Executive Karen Betts said:

"Reform of alcohol duty has been a long term goal of the Scotch Whisky industry and is our number one ask of all political parties in the General Election.

"This announcement is welcome, and opens the door to reforming a broken system in which large inconsistencies between alcohol categories put Scotch Whisky and the wider UK spirits industry at a competitive disadvantage.

"A simplified alcohol duty regime in the UK to better reflect alcohol content would be fairer for consumers, increase competitiveness and, according to robust, independent economic research, remain an important driver of tax revenue to support public services.

"Of course, the devil is in the detail and we look forward to working with HM Treasury officials on our detailed proposals submitted ahead of the Budget to ensure we have an alcohol tax system fit for the 21st century."
For more information please contact pressoffice@swa.org.uk or call 0131 222 9200

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SWA response duty system review | Scotch Whisky Association

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Skip to the content Read the SWA response to the recent announcement of a review into the UK alcohol duty system. Commenting on the Conservative manifesto commitment to review UK alcohol taxation, announced by the Prime Minister in Speyside, SWA Chief Executive Karen Betts said: "Reform of alcohol duty has been a long term goal of the Scotch Whisky industry and is our number one ask of all political parties in the General Election.

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Threats of Substitution

Dalmore operates in a market of homogenous products

For the other brands competing dalmore in their price range, each upholds different flavour. Therefore, when it comes to consumers purchasing a bottle of scotch, they shift their preferences only by the significance of the taste of one specific distillery, and are not too sensitive about the price of the Soctch

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This market for premium whisky is well segmented

The price per bottle fluctuates according to the demand and annual production

The industry can be seriously affected by government policy

Not sold in grocery stores like waitrose

Target customers are middle aged men

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Supplier power

High bargaining power due to the extremely inelastic demand for high quality scottish grain

Cost of changing is huge for Dalmore. It is critical to have a reliable supplier for the whiskies produced each year.

The supply is unique as it has to be the wheat produced in Scotland

limited amount of suppliers

The dalmore owns a grand collection of varieties of casks. Thus, cask suppliers do have little negotiating power.

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Competitive Rivalry

The whisky industry is well segmented in to Scotch, bourbon, and Japanese whisky. Therefore, when it comes to scotch, famous distilleries have hundred of years of history, and the precious inheritance of craftsmanship illustrates that there is only a limited amount of businesses in the market, which reduces rivalry

Scotch whiskies are well differentiated by the content of their product, each brand do produce the whisky in different ways to give it different flavour

Premium whisky is a Veblen good,  competition causes by aggressive pricing is very unlikely

The other distilleries demands the same premium scottish barley, and might offer higher price when there is shortage in annual production

Rivals are highly committed in the business

Exit barriers are high

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Scotch Whisky Association and others v The Lord Advocate and another (Scotland)

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Buyer power

The demand for high quality whiskies  is higher than the supply

Dalmore's customers are not very sensitive to price

No switching cost

A relatively high difference between competitors

Ability to substitute is high

Size to each order is small

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Barrington-Leigh, Christopher P (2008): Veblen goods and neighbourhoods: endogenising consumption reference groups.

Abstract

One of the significant developments in the last four decades of economics is the growing empirical evidence that individual consumption preferences, as mea- sured by self-reported life satisfaction, are neither fixed nor self-centred but are instead overwhelmingly dominated by externalities, partly in the form of reference levels set by others and by one's own experience. Welfare analysis recognising this fact is likely to indicate enormous revisions for macroeconomic policy and social objectives as well as for what is taught in economics at all levels. Yet the task of constructing general equilibrium models based on this microeconomic re- ality is still in its infancy. In this work I take the conventional stance that decision makers understand their own utility function. Therefore, they can choose the mi- lieu in which they immerse themselves with the sophisticated understanding that it will affect their own consumption reference levels and therefore the degree of satisfaction they derive from their private consumption. At the same time, their private consumption will help to set the reference level for others in their chosen group. I treat theoretically the problem of such endogenous formation of consump- tion reference groups in the context of a simultaneous choice of neighbourhoods and home consumption amongst a heterogenous population. For both discrete and continuous distributions of types, I find general equilibrium outcomes in which differentiation of neighbourhoods occurs endogenously and I compare the welfare implications of growth in such economies.

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Veblen goods and neighbourhoods: endogenising consumption reference groups

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Barrington-Leigh, Christopher P (2008): Veblen goods and neighbourhoods: endogenising consumption reference groups. One of the significant developments in the last four decades of economics is the growing empirical evidence that individual consumption preferences, as mea- sured by self-reported life satisfaction, are neither fixed nor self-centred but are instead overwhelmingly dominated by externalities, partly in the form of reference levels set by others and by one's own experience.

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Market Size, Growth Rate and Profitability

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Market Size, Growth Rate and Profitability

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In 2018, the export value of Scotch Whisky grew +7.8% by value, to a record £4.70bn. The number of 70cl bottles exported also reached record levels growing to the equivalent of 1.28bn, up +3.6%.

Scotch Whisky accounts for 70% of Scottish food and drink exports, 21% of all UK food and drink exports, and 1.3% of all UK exports

41 bottles (70cl @40% ABV) of Scotch Whisky are shipped from Scotland to 175 markets around the world each second, totalling over 1.28bn every year

More than 10,000 people are directly employed in the Scotch Whisky industry in Scotland and over 40,000 jobs across the UK are supported by the industry

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Latest figures reveal a strong year for Scotch Whisky exports in 2018 with global growth in both value and volume.

2018 was another year of strong export growth for Scotch Whisky, attesting to its enduring popularity in different countries and among cultures right across the world.

Quite simply, Scotch Whisky remains the whisky everyone wants to drink.

For further information please contact the SWA Press Office on 0141 221 0707 or email pressoffice@swa.org.uk

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Skip to the content Latest figures reveal a strong year for Scotch Whisky exports in 2018 with global growth in both value and volume. 2018 was another year of strong export growth for Scotch Whisky, attesting to its enduring popularity in different countries and among cultures right across the world.

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Strength

Exceptional casks selected from world’s finest bodegas and exclusive wineries

Distinctive maturing method

Consistent quality

Contribution from mater distiller Richard Patterson for over 5 decades

Strict quality control

Reliable barley suppliers

History trace back to King Alexander III  in 1263

Reputation built since 1839

TOP 25 for producing capacity

Partnership with the Emirates

The distillery welcome visits upon reservation

Does not use peated malt

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Discover the art behind the unique character and taste of The Dalmore single malt whisky and find out about its stunning Highland distillery.

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Maintain the quality of their product

High customer retention

Better brand recognition

Create wider range of products

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Threats of New Entry

Face a minimal threat by the new entrants as dalmore have its distinctive method of distilling whisky

Dalmore's experience in crafting whisky cannot be easily challenged by the new entrants

Entry barriers are high as the whisky requires years of ageing to be able to sell on the market

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Weakness

Price is high

Lack of variety of products in different price points

Specialise in smooth whisky

Lack of advertising

Very selective on its distributors

Does not collect information on its customers for better services

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Opportunities

Development in Asian countries  who's unfamiliar to premium whisky

Very few competitors challenges Dalmore in smooth whisky category

Form a stronger bond with bars and clubs to sell their product

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Richard Paterson Interview   UK Cigar Scene Magazine

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Threats

Relies on high quality scottish wheat to produce whisky , thus potentially affected by uncontrollable weather

Government's attitude towards heavy tax on alcohol