The Future of UK Whisky Exports: Which markets are set to grow in 2025?

The future of UK whisky exports isn’t exactly bright. Several key markets demonstrate potential, but the numbers don’t make for the prettiest reading. 

Which markets are set to grow in 2025? Drawing from key industry insights and market data, we’ll break it down for you. 

Challenges in the whisky market for 2025

UK whisky exports down in 2024

Whisky exports from the UK plunged by double digits in volume and value in the first nine months of 2024, according to figures from trade body the Food & Drink Federation (FDF). 

A decline in sales in the US – the UK’s third-largest export market and one that accounts for more than 10% of all British food and drink exports – was a factor. Exports were down by 23.2% in value to £558m and by 19.8% in volume during the first nine months of 2024. 

While whisky remains the UK’s number one food and drink export, dwarfing salmon, cheese, and chocolate, they all grew. 

Even Scotch?!

The Scotch Whisky Association (SWA) didn’t relieve any tension, reporting that exports of Scotch fell by 18% in the first half of 2024 compared with the same period in 2023.

Context is important and a record-breaking 2022 means that a decline from that level wouldn’t necessarily be disastrous, but it’s the scale that’s troubling. Data from HMRC (His Majesty’s Revenue & Customs) reveals a steep drop in the value of Scotch whisky exports down to £2.1 billion. That’s an 18% decrease, or £463.2 million in change. The volume of exports fell by 10.2%, to the equivalent of 566 million 700ml bottles, or four fewer bottles exported every second.

What’s the problem? Like many markets, whisky faces significant challenges and will continue to do so in 2025.

Challenges for the whisky market in 2025

Economic Uncertainty: Global economic instability. Feels like we’ve been talking about that each year since… God who even remembers at this point? Inflation, currency volatility, cost of living crises… all this and more are a risk for whisky exports. Fundamentally it’s a luxury good. When people are struggling for the essentials they aren’t as keen to splash out. This is a market that needs middle-class spending and the persistent economic pressures of our time are squeezing this pool of whisky buyers.

Regulatory Hurdles: The administrative burdens of exporting often feel like a creative way of punishing the already beleaguered consumer but countries persist anyway. Regulations, tariffs… name a bureaucratic hurdle and whisky faces it. Navigating these complexities requires more collaboration. Unfortunately, everybody hates each other at the moment. 

Supply Chain Disruptions: Whisky is a product. The glass for the bottle has to come from somewhere. Somebody has to ship it. And so on. So global supply chain issues, from rising shipping costs to packaging shortages, impact this industry like any other. Smaller distilleries are particularly vulnerable to these disruptions. This will spell disaster for some. I’m sorry but all signs point to the fact that, unless something changes, we will lose distilleries in the next couple of years.

Markets not poised for growth

Given the above reasons and more, not all regions are ripe for whisky export expansion. Here are some particularly difficult places for whisky to make headway.

Russia: Surprise, surprise. Geopolitical tensions and trade sanctions have significantly reduced whisky exports to Russia. Following the Russia-Ukraine conflict, major whisky brands reduced or ceased direct exports to Russia. For instance, exports of Scotch whisky to Russia decreased from £28 million in 2021 to £12.7 million in 2023. Additionally, Russia doubling import tariffs on Scottish whisky to 20% of the value, with a minimum of €3 per litre, further complicates the market. 

Middle East: Despite a wealthy consumer base, strict alcohol regulations in many Middle Eastern countries limit market penetration. While nations like the UAE have relaxed laws, allowing consumers to purchase alcohol without a government-issued license, others maintain strict prohibitions. For example, Iraq banned the sale of alcohol in social clubs and hotels, eliminating some of the last venues serving alcohol in the country. These regulatory differences make it difficult for exports to penetrate the Middle Eastern market.

Southern Europe: Traditional whisky markets in Southern Europe, such as Spain and Italy, are experiencing stagnation. In Spain, the whisky market registered a compound annual growth rate (CAGR) of -3.4% during 2017-2022, indicating a decline. Economic pressures are influencing consumer preferences and there’s a growing trend towards local products like gin and wine over imported whisky. Honestly, given how good drinks are in Italy and Spain, who can blame them? But please also buy whisky, guys. It’s good for the economy. 

The Future of UK Whisky Exports: Which markets are set to grow in 2025?

It’s not all doom and gloom. Here’s the markets that could provide some stimulus or relief for the UK whisky export market in 2025.

India: the world’s largest whisky market awaits

India is a crucial market for UK whisky exports. It’s the biggest buyer of Scotch whisky now by volume and value. Its middle class is actually growing, and with it so are disposable incomes and aspirational desires. There’s a healthy local whisky scene that has bags of potential and huge brands like Diageo and Pernod Ricard already make silly money selling whisky (if you call it that). 

Despite this growth, Scotch whisky accounts for just 2% of all whisky consumed in India, indicating significant potential for expansion. And the SWA says we’re leaving up to £300m on the table. How?

Import tariffs. Currently among the highest in the world at around 150%, these tariffs and other regional restrictions have created a damn that won’t let the river of whisky flow through. The previous UK government had been negotiating the UK-India Free Trade Agreement and the current government promises to restart these talks with hopes of reaching an accord.

The SWA has urged the government to get this done. It reports that a phased reduction of the tariff would benefit industries in both the UK and India and could see the value of Scotch whisky exports grow by £1bn (US$1.3bn) over five years. The huge market potential here would do a lot to mitigate the slowdown in other markets.

China: luxury, youth, and opportunity

China’s luxury market is the second largest globally and continues to expand. This is fertile ground for premium UK whisky exports. 

Whisky made in the UK, specifically single malt Scotch whisky, boasts an air of sophistication that has significant cultural appeal across the world, with the youth of China being especially interested and poised to take advantage. 

Research from Bain & Company highlights that Chinese consumers under 35 account for 50% of luxury purchases, with a growing interest in Western spirits, including single malts and rare whiskies.  

United States: hope even after the decline

The United States remains the UK’s largest whisky export market and even though growth slowed and the dreaded notion of tariffs has been discussed at length, some bright spots give hope. For a start, Master of Malt is delivering there again. How about that folks? 

Alright, you want more reasons to be optimistic. I get it. Well, there is a bit more trade stability following the resolution of the Airbus-Boeing tariff dispute. And American consumers continually demonstrate an interest in small-batch, craft, and limited-edition whiskies. 

While there’s plenty of options domestically now, including officially recognised American single malt, fundamentally Scotch continues to be the whisky that reflects luxury and status in the US. In certain markets like California, New York, and Texas, there’s enough money to make a difference. 

Southeast Asia: legislative wins and hotspots get hotter

You might have missed this, but on 15 December 2024, the UK officially joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – a trade agreement of 12 nations, predominantly in the Asia-Pacific region.

What the heck does all that mean? Tariff-free access when trading many products with Malaysia and improved export terms for several markets, as well as ‘more generous rules of origin’, the FDF says. Which means drink manufacturers can access more markets. Create more resilient supply chains. We told you there was some actual good news.

This is particularly well timed as countries in Southeast Asia, like Vietnam, Thailand, and the Philippines continue to gain prominence as whisky markets. Huge populations with rising disposable incomes and a hunger for the water of life = good times potential. Euromonitor International identifies Vietnam as one of the fastest-growing spirits markets in the region, with whisky consumption expected to rise by 7% annually through 2025.

Africa and Latin America: expansion, aspiration, and a nice dram to boot

In Africa, countries such as South Africa and Nigeria offer substantial growth potential due to their youthful demographics and expanding economies. According to the World Bank, Nigeria’s population is expected to surpass 230 million by 2025, with a median age of just 18.

Whisky’s aspirational appeal resonates with younger consumers seeking premium and imported goods. South Africa’s established whisky culture and growing interest in single malts provide additional opportunities for brands looking to expand their footprint.

The same is true for Latin American markets, particularly Mexico and Brazil. Economic recovery in these nations and shifting drinking habits among younger consumers are driving growth. 

Mexico’s free trade agreements with the UK post-Brexit have facilitated smoother exports, while Brazil’s growing interest in Scotch aligns with its burgeoning middle class.

Irish whiskey exports are more promising 

There is also good news out of Ireland. Which is not part of the UK, obviously. Look at my last name. I know this. But in whiskey terms, Bushmills and co. in Northern Ireland are part of the Irish whiskey industry, so it’s worth considering how that market is doing. 

Irish whiskey exports hit a record €1 billion in 2024, marking a robust recovery after a 14% decline the previous year. This accounts for nearly half of Ireland’s €2.1 billion drinks export industry. The United States remained the dominant market, representing 40% of exports with an 11% increase in shipments, while Canada saw a 29% surge. 

Growth in the EU reached 12%, driven by standout performances in Belgium (+67%), Poland (+17%), and Germany (+11%), although France experienced a 14% decline. Asia showed significant potential, with Indian exports more than doubling, and China rebounding with a 60% increase, alongside strong performances in Japan, the Philippines, and South Korea.

Despite strong growth in many regions, challenges persisted in 2024. The UK market declined by 10%, and global factors such as slow depletion rates, price pressures, and brand consolidation added to difficulties. While premiumisation has slowed due to economic pressures, the trend is expected to recover in the medium term. The Asia-Pacific region, particularly Australia (+66%), and Africa, led by South Africa’s 21% growth, emerged as promising markets, contributing to a diverse recovery for Irish whiskey exports in an increasingly competitive global landscape.

Whisky still has a global landscape of opportunity

We can see that consumer demand for whisky is there. Give it a platform and it will sell. When it’s given opportunities from favourable trade agreements or markets where disposable income is on the rise, whisky does the business. If UK exports can thrive in these markets it could bounce back with some robust growth in 2025. 

To capitalise on these opportunities, brands will maintain their focus on “premiumisation”. Which means highlighting heritage, craftsmanship, and provenance to appeal to more discerning consumers. The kinds that have wonga to spare. Social media and e-commerce platforms will continue to be utilised to reach younger audiences where there’s proof they can afford a dram, and the good ol’ fashioned method of increasing visibility with partnerships with local distributors and influencers in key markets never let anyone down.

If the UK whisky industry’s ability can adapt to changing market dynamics and consumer preferences, it will have success stories. Whether that’s enough to avoid a whisky loch, distillery closures, zombie apocalypse etc. is something only time will tell. 

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