Sir Keir Starmer has secured a significant win for Scotch whisky, with China agreeing to cut the tariff from 10% to 5%.
The deal, signed during the Prime Minister’s visit to Beijing, will be worth an estimated £250 million to the UK economy over the next 5 years.
China is currently Scotch whisky’s 10th largest market by value, though sales have been volatile in recent times.
Dave Lewis, chief executive of Johnnie Walker maker Diageo is said to be considering the sale of its Chinese assets as it seeks to trim its portfolio amid falling sales in the world’s second-largest economy.
However, the Artisanal Spirits Company, owner of the Scotch Malt Whisky Society, said last week that it had seen an improved performance in China in the second half.
The latest agreement follows the landmark UK-India trade deal, which slashed Indian import tariffs on Scotch and is set to increase sales to India by up to £1 billion a year. That deal alone is expected to grow the Scottish economy by £190m annually.
Sir Keir said: “Our whisky distilleries are the jewel in Scotland’s crown. Having already slashed tariffs on whisky exports to India, we’re now doing the same with China – proof that our pragmatic, hard-headed international engagement brings benefits at home.”
Douglas Alexander, Secretary of State for Scotland, said: “This is another tremendous result delivered by the UK Government for Scotland’s world-renowned whisky industry.
“From Delhi to Beijing, this government is opening doors for Scottish exporters and putting money in the pockets of working people across Scotland.
“Just months ago we secured a trade deal with India transforming the prospects for Scotch in the world’s largest whisky market. Now we have delivered again in China.
“The message is clear: with the strength and support of the UK Government behind them, Scotland’s finest products can reach every corner of the globe. We will keep fighting for Scottish businesses and Scottish jobs.”
Mark Kent, chief executive of the Scotch Whisky Association, said: “China is a priority growth market for many Scotch Whisky producers, which in recent decades has developed into a knowledgeable and premium focused market with a strong appreciation of Scotch.”
The proposed tariff cut “has the potential to re-energise exports of Scotch to this important market”, he said.
Visa agreement
The Prime Minister also secured agreement on a 30-day free visa for travel to China.
Trip.com UK country head, Fred Fishlock, said: “Trip.com Group analysis shows interest in China rose 74% in the five weeks following the Visa announcement across Germany, France, Italy, Spain and the Netherlands, and was 88% higher over the following 12 months.
“Over the same period, Trip.com Group flight bookings to China from these markets were 50% higher, as travellers moved quickly from inspiration to booking.”
Rain Newton-Smith, CBI chief executive, said: “With global trade central to the country’s growth mission, the government deserves credit for securing new trade deals, navigating complex political challenges and renewing the UK’s international relationships.
“The Prime Minister’s visit to China marks an important step on that journey and will help UK firms seize the significant opportunities offered by one of the world’s largest and most dynamic economies.
“Agreeing visa?free travel and paving the way towards a future bilateral services agreement are meaningful advances that will turbocharge the UK’s world?leading services sector, supporting jobs and growth at home.”
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