The Economic Impact of Scotch Whisky Production in Scotland

May 2010

Report by

Verso Economics Victoria House 58 Victoria Road Kirkcaldy KY1 1DQ

EXECUTIVE SUMMARY ...... 2 1 INTRODUCTION ...... 5 2 SCOTCH WHISKY PRODUCTION ...... 6 3 SUPPLY CHAIN & HOUSEHOLD IMPACTS ...... 12 4 ECONOMIC IMPACT ON RURAL SCOTLAND ...... 15 5 SUMMARY ...... 17 REFERENCES ...... 21 PUBLICATIONS ...... 21 WEB LINKS ...... 21 APPENDIX ...... 22

1 Executive Summary

• Scotch Whisky contributes £2.7 billion in Gross Value Added (GVA) to Scotland’s economy;

• The industry employs over 10,000 workers, with a total gross income of £464 million;

• The wider economic footprint supports around 35,000 jobs and nearly £3.9 billion GVA (direct, indirect and induced impact);

• Whisky producers’ spending on Scottish suppliers increased 61% from 2000 to 2008 rising to £1.1 billion;

• Employees are three times as productive as London’s business and finance workers, and six times the Scottish average; and

• Scotch Whisky’s impact is 60% higher than Scotland’s creative industries’ GVA (including television, radio, publishing, film and software) and is similar to tourism.

Scotch Whisky production

Scotch Whisky plays a vital role in the Scottish economy with producers employing over 10,000 workers and generating gross income of £464 million. The industry contributes Gross Value Added (GVA) of £2.7 billion towards Scotland’s economy and one in five workers is employed in rural communities.

Beyond the direct impact Scotch Whisky has a much wider economic footprint through links with Scottish suppliers, investment in Scotland and through high street spending by workers involved in the production of Scotch Whisky. The industry supports nearly 35,000 jobs and creates value of nearly £3.9 billion each year in profits and wages (GVA) across the Scottish economy.

2 Scotch Whisky: Producers (£ million and jobs)

Turnover Gross Value Added Income Employment

£3,940 £2,697 £464 10,284

Scotch Whisky: Total impact (£ million and jobs)

Turnover Gross Value Added Income Employment

£6,394 £3,876 £1,132 34,940

The economic impact of Scotch Whisky is larger than most key sectors supported by the Scottish Government and Scottish Enterprise. The economic impact of Scotch Whisky production generates 60% more (GVA) than Scotland’s creative industries (£2.4 billion) and is similar to tourism (£4 billion) in terms of GVA.

In terms of employment, Scotch Whisky is responsible for a similar number of jobs as all of Scotland’s universities combined; universities are identified as a key sector by the Scottish Government. The number of jobs supported by the production of Scotch Whisky is more than double the number of jobs in aerospace & defence in Scotland.

Supply chains

Spending by Scotch Whisky producers on Scottish suppliers has markedly increased over the last decade, and producers are increasingly sourcing goods and services from Scottish suppliers. The latest survey shows over four fifths of operating costs are sourced from within Scotland helping create £1.1 billion of demand for Scottish suppliers.

The proportion of operating costs sourced locally by Scotch Whisky is nearly double the average for manufacturing and markedly ahead of the Scottish economy. The movement towards Scottish suppliers has been partly offset by an investment programme drawing on suppliers from around the world.

Overall employment levels have remained relatively stable over the last decade. Whilst jobs in Scotch Whisky production are lower than ten years ago, the majority of the decline in employment has been felt outside of Scotland. Scottish employment has risen in activities such as sales and marketing, engineering, visitor centres and by-products but is lower in distilleries and blending and bottling.

3 Productivity, competitiveness and exports

Scotch Whisky is among the most productive industries in Scotland, second only to oil and gas. Continued growth in overseas exports (over £3 billion in 2008) and rising product values have provided a strong platform for industry growth. GVA per employee is just over £262,000, more than three times that of business and financial services in London and nearly six times as productive as the average Scottish worker.

Average gross employment costs (mainly wages and salaries) are just over £45,000, more than double the Scottish average. Embedded industry skills play a strong role, with Scotch Whisky spending nearly £4 million on workforce training each year with nearly 23,000 days of training per annum across the industry.

Scotch Whisky workers add more value than workers in any key sector of the Scottish economy with the exception of oil and gas. The value added by the average Scotch Whisky employee is more than twelve times that of employees in tourism and even in the research intensive area of life sciences the average Scotch Whisky worker produces more value (wages and profits) than six life science workers.

The value of international exports of Scotch Whisky (£3.1 billion) is more than four times the value of either business service exports (£0.7 billion) or financial services (£0.6 billion). Other key sectors are markedly behind the export performance of Scotch Whisky; international exports of Scotch Whisky are nearly nine times the value of textiles exports.

4 1 Introduction

1.1 Verso Economics was commissioned by the Scotch Whisky Association (SWA) to undertake a study of the contribution that Scotch Whisky producers make to the Scottish economy. The study updates a previous report (DTZ Pieda Consulting, January 2003) which demonstrated the economic impact of Scotch Whisky production during the year 2000.

1.2 This report shows the economic impact of Scotch Whisky during the year 2008. The economic impact calculations are based on a survey of the SWA membership, data published by the Scottish Government and data regularly collected and published by the SWA.

1.3 Thirteen SWA members provided responses to the economic impact survey covering over 90% of employment in the Scotch Whisky industry. A small number of estimates for SWA members were made where survey information was not available. Headline information for non-members was provided by the SWA and more detailed analysis has been grossed up to the overall population figures covering members and non-members.

5 2 Scotch Whisky Production

Spending, employment and investment

2.1 The SWA regularly collect information from their members including employment figures. Table A.1 (appended) shows SWA members employed 9,792 workers in the production of Scotch Whisky across the UK with a further estimated 745 workers among non-SWA members giving total UK industry employment of 10,537. Nearly one third of workers (31.5%) were employed in bottling and blending.

2.2 Of the 9,792 workers employed by SWA members, 9,557 (97.6%) were employed in Scotland (Table A.2). Total employment in the production of Scotch Whisky in Scotland was 10,284 during 2008, assuming non-members have the same proportion of their workforce based in Scotland as members.

2.3 Overall employment in Scotch Whisky production has fallen over the last decade but the majority of the decline in employment has been felt outside of Scotland. Employment among the SWA membership in Scotland has been relatively stable declining by just over 3% compared to fall of nearly 12% across the UK (Table A.2). Scottish employment has risen in activities including sales and marketing, engineering, visitor centres and by-products, whilst it is lower in distilleries and blending and bottling.

2.4 An additional survey was issued to all SWA members to collect information on their Scottish operations. The summary results of this survey are shown in Table 2.1, the results cover all SWA members with outcomes increased by 7.6% to account for non-members (based on employment).

Table 2.1: Scotch Whisky production in Scotland 2008 (£ million and jobs) Operating Employee Turnover Investment Workers Costs Costs Overall (£m) £3,940 £1,243 £464 £355 10,284 In Scotland (%) 100% 81% 100% 30% 100% In Scotland (£m) £3,940 £1,005 £464 £108 10,284

SOURCE: Verso Economics survey of Scotch Whisky producers

6 2.5 Scotch Whisky production in Scotland had turnover approaching £4 billion and employed over 10,000 workers. Of the £1.2 billion operating costs, £1 billion (81%) was spent on Scottish suppliers. Capital spending (investment) in 2008 was £355 million of which nearly one third (30%), £108 million, was spent on capital items made in Scotland.

2.6 The specialist nature of capital equipment helps explain why less than a third of capital items (30%) are sourced from within Scotland. Capital items like machinery, vehicles and software are less likely to be produced in Scotland. By contrast, operating costs include items such as energy and cereals which are almost wholly sourced from within Scotland.

2.7 Regardless of where items are sourced, the capital investment made by Scotch Whisky has helped bring valuable capital stock into Scotland. This has helped improve the competitiveness of the economy, creating a centre of excellence for the production of spirits in the UK.

Production trends

2.8 Total employee costs were nearly half a billion pounds for all employees based in Scotland. Table 2.2 shows that income rose by 70% from 2000 to 2008. Table 2.2 draws on information from the previous economic impact report for the year 2000 (DTZ Pieda Consulting, 2003).

2.9 The DTZ Pieda Consulting study cited a lower employment figure for 2000 compared to SWA member employment for 20001; hence growth in employee costs is higher than growth in average income. Average gross employee income in 2008 (based on employee costs) was just over £45,000.

Table 2.2: Scotch Whisky production in Scotland: 2000 & 2008 Average Scottish Supplier Employee Employee Expenditure* (£m) costs (£m) Income 2000 £690 £254 £26,533 2008 £1,113 £464 £45,119 Change (%) +61.3% +82.7% +70.0%

SOURCE: Verso Economics (2008 figures), DTZ Pieda Consulting (2000 figures) NOTES: *Scottish supplier expenditure includes operating expenditure and capital expenditure

2.10 Spending on Scottish suppliers has increased considerably from 2000 to 2008 and Scotch Whisky producers are now sourcing more goods and services from Scottish suppliers. In 2000 Scotch Whisky producers sourced just over two thirds of goods and services (68%) from within Scotland including operating and capital expenditure. By 2008 over four fifths (81%) of operating expenditure (not including employee costs) was sourced within Scotland including items such as cereals and energy costs.

1 Therefore care must be taken in comparing employment figures with the previous study.

7 2.11 The latest data 2 (for the year 2004) shows that across the Scottish economy just under two thirds of all operating costs are sourced locally (65%) compared to 42% for Scottish manufacturing. The proportion of operating costs sourced locally by Scotch Whisky (81%) is nearly double the average for manufacturing and markedly ahead of the Scottish economy benchmark.

Gross Value Added (GVA)

2.12 Scotch Whisky production is a high value activity. The proportion of turnover accounted for by Gross Value Added 3 (GVA) is high relative to the rest of the Scottish economy, but the figure follows the trend for spirits published by the Scottish Government (see web links) shown in Figure 2.3. The Annual Business Inquiry (ABI) showed that in 1998 GVA accounted for 37.9% of turnover in the production of spirits in Scotland. The value added share of turnover had risen to 63.3% by 2007. The 2008 estimate was 68.4%, based on the survey of SWA members.

2.13 One approach to measuring GVA is to subtract operating costs (inputs) from turnover (outputs) providing an indication of the value added by Scotch Whisky producers. The turnover and operating cost figures from Table 2.1 suggest GVA of £2,697 million with the value added accounting for 68.4% of turnover.

2.14 When GVA accounts for a higher share of turnover it usually points towards profitable production, relatively well paid employees and healthy capital investment levels. The ABI data published by the Scottish Government indeed shows a sharp rise in the productivity of spirits production with GVA per employee at £195,900 and average employee costs at £46,600 for 2007.

2 The Scottish Government provides estimates of the proportion of operating costs that are sourced locally for a range of Scottish industries (as part of the Input-Output tables, see web links).

3 Gross Value Added (GVA) is a measure of production used to measure growth and developments in an economy and individual industries. The UK Office for National Statistics (ONS) and the Scottish Government both provide a short summary of GVA (see web links) and how it can be used to benchmark production activities.

8 Figure 2.3: GVA % of turnover 1998 to 2007 (Spirits) and 2008 (Scotch Whisky)

SOURCE: Verso Economics (2008) and Scottish Government (1998-2007) see web links

2.15 The figures shown in Figure 2.3 are from two distinct sources; Annual Business Inquiry (ABI) data published by the Scottish Government covering 1998-2007, and the survey of SWA members for 2008. The statistics from the Scottish Government and the 2008 survey are similar and demonstrate a continued trend of improvement with productivity and profitability rising despite the economic downturn. The survey of SWA members shows a slightly better picture reflecting record exports of over £3 billion for the first time in 2008 (Scotch Whisky Association, May 2009).

2.16 The 2008 figures for Scotch Whisky show GVA per employee at £262,226 and average employment costs of £45,119. These indicators of productivity and income are significantly ahead of the rest of the Scottish economy. Overall Scottish figures from the ABI for 2007 show GVA per employee of £45,741 and average employee costs of £22,278; the equivalent figures for Scottish manufacturing are £61,252 GVA per employee and £28,866 average employment costs.

9 Education, skills and training

2.17 All SWA member survey respondents (13) provided training for their employees. This compares to just under two thirds (65%) of all Scottish employers during 2008 and just over half (52%) of all Scottish manufacturing employers (Source: Skills in Scotland 2008, Scottish Government, March 2009).

2.18 The relative performance of Scotch Whisky producers is encouraging as a number of producers are small employers with fewer than 25 employees. The Skills in Scotland 2008 report shows that, unlike Scotch Whisky producers, smaller employers are less likely to offer training and training is less prevalent among processing occupations (packers, bottlers and goods handlers).

2.19 Scotch Whisky employees spend an average of 2.2 days training each year, nearly 23,000 days each year across the industry. Scotch Whisky producers spend £3.8 million on training each year, shown in Table 2.4.

Table 2.4: Scotch Whisky training in Scotland (2008) Proportion Days of Average Training Average Workers offering training days costs (£m) costs (£) training 10,284 100% 22,569 2.2 £3.8 £372

SOURCE: Verso Economics survey of Scotch Whisky producers

2.20 The Skills in Scotland 2008 report does not provide an average number of days trained. Instead the report suggests that around one third of employers (34%) had arranged between three and five days off-the-job training for staff and a quarter (26%) had arranged one to two days on average.

2.21 The above figures suggest that Scotch Whisky production is ahead of the rest of Scottish manufacturing in terms of the average amount of training, after accounting for nearly half of all manufacturing employers offering no training. Scotch Whisky employees are, on average, trained for around the same number of days as all Scottish employees. The Scottish average is significantly raised by the prevalence and intensity of training among public sector employers.

2.22 A detailed table of Scotch Whisky occupational employment is provided in the appendix (Table A.3). A summary of occupational employment is provided in Table 2.5 for Scotch Whisky, based on the survey of producers, and all Scottish workers, based on the Annual Population Survey (APS) from July 2008 to June 2009.

10 Table 2.5: Skilled employment in Scotland (2008) All Scotch Occupations Scotland Whisky

Management, professionals & technical occupations 42% 22%

Administrative, skilled trade and personal service occupations 32% 22%

Sales, customer service and process operatives 27% 61%

SOURCE: Verso Economics survey of Scotch Whisky producers and Annual Population Survey (APS)

2.23 The majority of employment in Scotch Whisky production falls within process occupations. Significant areas of employment include packers, bottlers and those operating machinery.

2.24 Scotch Whisky employment in Scotland has remained reasonably stable over the last decade with the industry at the same time making significant new capital investment. This is an unusual story in Scotland where many traditional areas of manufacturing have declined or disappeared through new technologies or international competition.

2.25 The Scotch Whisky industry still places an emphasis on traditional skills, providing employment opportunities across a wide range of social groups. The opportunities are well paid, high quality jobs with strong representation in rural communities (shown in Section 4).

11 3 Supply Chain & Household Impacts

Developing supply chains

3.1 Scotch Whisky producers have significantly increased spending with Scottish suppliers. Part of this increased spending is a result of rising commodity prices where Scottish suppliers are particularly competitive. For example, energy and cereals are more likely to be sourced from within Scotland.

3.2 In 2000 energy accounted for 4.1% of operating costs but by 2008 energy costs had risen to 8.5% of all operating costs. A detailed set of operating costs and investment in Scotland is shown in Table 3.1.

Table 3.1: Detailed operating costs and investment in Scotland (£ million)

Scottish Operating Costs Scottish Investment

Dry goods (bottles, packaging) £302 Plant & machinery £70 Cereals £201 Land, buildings and property £32 Energy £85 Other £5 Transport & distribution £30 Other £417 Total £1,005 Total £108

SOURCE: Verso Economics survey of Scotch Whisky producers

Supply chain impacts

3.3 By mapping operating costs and investment to production categories it is possible to show how supply chains are supported across Scotland’s economy 4. For example, £68.7 million of operating costs were allocated to paper and paperboard products (from the £302 million spending on dry goods shown in Table 3.1).

4 The latest Input-Output tables published by the Scottish Government (see web links) provide output (turnover), income, GVA and employment multipliers for over one hundred different production activities.

12 3.4 The spending on paper and paper board results in an overall impact of £106.4 million across the Scottish economy creating demand for a further £4.1 million of electricity and £2.8 million in distribution. The overall impacts on turnover, GVA income and employment are shown in Table 3.2 5.

Table 3.2: Supply chain economic impact (£ million and jobs) Operating Costs Investment Total Supply Scottish Impact Impact Chain Impact Scottish operating costs £1,005 £108 £1,113 Indirect and induced turnover £771 £68 £839 Total impact on turnover £1,776 £176 £1,952 Total GVA impact £821 £86 £907 Total income impact £475 £53 £528 Total employment impact 16,280 1,926 18,206

SOURCE: Verso Economics survey of Scotch Whisky producers and Scottish Government Input-Output tables

Household impacts

3.5 The employee costs of £464 million (outlined in Tables 2.1 and 2.2) were comprised mainly of wages and salaries paid to workers. Other employee costs included items such as pensions. Wages and salaries are paid to workers and then spent by households. Overall spending by households was estimated as 64% of income, shown in Table 3.3 below. The other 36% can be accounted for by taxes and initial spending on goods and services from outside of Scotland.

Table 3.3: Household Spending Economic Impact (£ million and jobs)

Household spending

Household spending £296 Indirect and induced turnover £206 Total impact on turnover £502 Total GVA impact £272 Total income impact £140 Total employment impact 6,450

SOURCE: Verso Economics survey of Scotch Whisky producers and Scottish Government Input-Output tables

5 The employment figures shown are based on the Scottish Government’s employment multipliers which use Full-Time Equivalent (FTE) employment. An adjustment needs to be made to show employees rather than FTE employees; the adjustment was based on Scottish Government calculations for converting FTE employees to employees (2 part-time employees are equal to 1 FTE employee).

13 3.6 Household spending of £296 million on Scottish goods and services creates further demand from suppliers with a total impact on turnover of £502 million. Household spending also creates £272 million of GVA, £140 million of income (beyond the £464 million paid to Scotch Whisky workers) and 6,450 jobs.

14 4 Economic Impact on Rural Scotland

4.1 Scotch Whisky production has played an important role in rural communities across Scotland. Distilleries are a source of well-paid jobs and are strongly aligned with wider tourism activities in rural economies.

4.2 Table 4.1 shows the split between urban and rural employment with just over one in five Scotch Whisky jobs (20.3%) in rural communities 6. Additionally, Scotch Whisky plays an important role in rural tourism which is not wholly captured in the economic impact figures presented in this report. Part of the economic impact associated with distillery visits (1.24 million visits in 2008) will be captured in this report. However, Scotch Whisky is an ambassador for Scotland overseas, helping the country to stand out in a crowded international market place for tourists.

Table 4.1: Urban and rural employment in Scotland 2008

Urban Rural Total 8,197 2,087 10,284 (79.7%) (20.3%) (100%) SOURCE: Verso Economics survey of Scotch Whisky producers

4.3 Table 4.2 provides a further breakdown of employment (SWA members) by area in Scotland. Strathclyde accounts for over half of all Scotch Whisky employment in Scotland with Central Scotland and Fife, Grampian and Lothian also accounting for significant shares of employment.

6 Direct employment from the previous section was split into rural and urban jobs based on information collected from Scotch Whisky producers. The definition of rural communities follows the Scottish Government definition covering both accessible and remote rural communities.

15 Table 4.2: Area employment in Scotland 2008 7 Central & Rest of Strathclyde Grampian Lothian Highland Fife Scotland

51.6% 16.9% 13.6% 11.0% 4.9% 2.0%

SOURCE: Scotch Whisky Association

7 The rural and urban employment of each producer was used to estimate the likely rural turnover, which was 23% of Scotch Whisky turnover (just over £900 million). This estimate suggests a link between higher productivity (turnover per worker) and rural operations. However, care needs to be taken as rural employment numbers are relatively small and can be influenced by performance of one or two operators in any given year.

16 5 Summary

5.1 Table 5.1 summarises the impacts presented in this report. The total impact of Scotch Whisky on Scotland’s economy is £6.4 billion of turnover adding around £3.9 billion in GVA. The industry generates just over £1.1 billion of gross income for workers based in Scotland and creates nearly 35,000 jobs.

Table 5.1: Summary impacts (£ million and jobs) Operating Direct Investment Household Total Impact Area Costs Impact Impact Impact Impact Impact Direct turnover, £3,940 £1,005 £108 £296 £5,349 spending & costs Indirect & induced - £771 £68 £206 £1,045 turnover Total impact on £3,940 £1,776 £176 £502 £6,394 turnover

Total GVA impact £2,697 £821 £86 £272 £3,876

Total income £464 £475 £53 £140 £1,132 impact Total employment 10,284 16,280 1,926 6,450 34,940 impact

SOURCE: Verso Economics survey of Scotch Whisky producers and calculations

5.2 Scotch Whisky is among the most productive industries in Scotland, second only to oil and gas. Continued growth in overseas exports (over £3 billion in 2008) and rising product values have provided a strong platform for industry growth.

5.3 GVA per employee is just over £262,000, more than three times that of financial and business services in London (£86,000, Source: Focus on London 2009) and nearly six times as productive as the average Scottish worker.

Comparison with Key sectors

5.4 Following the Scottish Government’s Economic Strategy (GES) seven key sectors were outlined by the Scottish Government where;

• Scotland has distinctive capabilities and businesses with the potential to be internationally successful in areas of global demand; • They currently account for a significant part of the Scottish economy and reflect the contribution of all areas of Scotland; and • Government intervention can make a significant difference to future success by facilitating or accelerating development in areas where the market alone cannot deliver the best outcome.

17 5.5 The Scottish Government provides a series of key sector profiles (see web links) covering universities, tourism, the life sciences sector, financial & business services, energy, creative industries and food & drink. Scottish Enterprise supports a number of additional key sectors with industry information provided on additional sectors including textiles, forestry, chemical sciences, aerospace & defence and construction (Scottish Enterprise, August 2009). This information is summarised in Table 5.2 below:

Table 5.2: Key sectors (£ million and jobs) GVA per Key Sector Turnover Employment GVA employee Exports (£ direct) Scottish Government key sectors

Universities* £2,480 35,159 - - -

Tourism £13,300 219,900 £4,000 £19,600 -

Life sciences sector £1,600 18,400 £763 £42,400 £675

Business services £17,200 263,400 £10,100 £41,555 £700

Energy (excl. oil & gas) - 33,000 £4,866 £160,949 -

Creative industries £5,200 60,700 £2,400 £41,600 £1,100

Food & drink producers £7,502 10,200 £3,152 £68,708 £4,695

Additional Scottish Enterprise sectors

Textiles £1,000 - - - £360

Forestry £760 - - - -

Aerospace & defence £2,280 16,200 - - -

Chemical sciences £9,300 14,000 - - £2,200

Construction - 130,000 £5,900 £45,385 -

Scotch Whisky impact £6,394 34,940 £3,876 £262,226 £3,100

SOURCE: Scottish Government and Scottish Enterprise NOTES: * Employment figures for Universities are FTE employment

18 5.6 The economic impact of Scotch Whisky is larger than most of the Scottish Government’s key sectors and Scottish Enterprise’s chosen key sectors (after accounting for Scotch Whisky making up for most of food and drink production). For example the economic impact of Scotch Whisky production generates 60% more value (GVA) than Scotland’s creative industries and is similar to tourism (based on a generous assessment of tourism GVA).

5.7 In terms of employment Scotch Whisky is responsible for a similar number of jobs as the whole of Scottish universities combined. The number of jobs supported by the production of Scotch Whisky is more than double the number of jobs in aerospace & defence.

5.8 The most marked results are shown in global exports (outside of the UK) and in productivity. Comparable productivity indicators were not available for financial & business services and energy including oil & gas in Scotland. Therefore business services and energy excluding oil & gas are shown in Table 5.2.

5.9 Scotch Whisky jobs add more value than jobs in any key sector within the Scottish economy (outlined in Table 5.2). The likely exceptions to this are the oil and gas elements of energy and chemical sciences but comparable GVA per employee figures are not available for Scotland.

5.10 The value added by the average Scotch Whisky employee is more than twelve times that of employees in tourism where productivity is low. Even the research intensive area of life sciences lags well behind Scotch Whisky with the average Scotch Whisky worker adding more value than six life science workers.

5.11 Exports are the other important area in which Scotch Whisky is leading the Scottish economy. The value of international exports of Scotch (Whisky £3.1 billion) is more than four times the value of either business service exports (£0.7 billion) or financial services (£0.6 billion) 8.

8 There are difficulties in calculating oil and gas exports from Scotland but it is reasonable to assume oil and gas exports are significant if the UK Continental Shelf is included as part of the Scottish economy. Chemical sciences (including some oil and gas activities) exports at £2.2 billion are significant but still well behind Scotch Whisky.

19 5.12 Other key sectors are markedly behind the export performance of Scotch Whisky; international exports of Scotch Whisky are nearly nine times the value of textiles exports. The importance of securing revenue and income through exports is important. For example, whilst Scottish universities sustain a similar number of jobs as the impact of Scotch Whisky, more than half of university funding comes from the public purse.

20 References

Publications

DTZ Pieda Consulting (January 2003) The Economic Impact of the Production of Scotch Whisky, Gin and Vodka in Scotland

Scottish Enterprise (August 2009) Scottish Keyfacts

Scottish Government (March 2009) Skills in Scotland 2008

Scotch Whisky Association (May 2009) Scotch Exports Show International Resilience

Web links

Greater London Authority: Focus on London 2009 www.london.gov.uk/focusonlondon/docs/fol09-full.pdf

Scottish Government: Gross Value Added definition www.scotland.gov.uk/Topics/Statistics/16170/4380

Scottish Government: Input-Output tables www.scotland.gov.uk/Topics/Statistics/Browse/Economy/Input-Output

Scottish Government: Key Sector Profiles www.scotland.gov.uk/Topics/Economy/Key-Sectors

Scottish Government: Profile of Scottish Spirits Sector www.scotland.gov.uk/Resource/Doc/933/0086587.xls

Scottish Government: Skills in Scotland 2008 www.scotland.gov.uk/Resource/Doc/263613/0078884.pdf

Office for National Statistics: What is Gross Value Added? www.statistics.gov.uk/cci/nugget.asp?id=254

Images courtesy of the Scotch Whisky Association www.scotch-whisky.org.uk , additional images from www.fotolia.com and copyright Paul Gibbings (freight), Okea (whisky glass) and David Woods (distillery).

21 Appendix

Table A.1: Scotch Whisky employment (2008)

Function Employment

Blending & bottling 3,080 Office units 1,760 Distilleries 1,086 Engineering & technical 874 Distribution 843 Maturation 533 Sales & marketing 380 Visitor centres 322 Cooperage 175 By-products 91 Maltings 80 Other functions 568 Total (SWA members) 9,792 Non-members 745 Scotch Whisky Total 10,537 SOURCE: Scotch Whisky Association

Table A.2: Scotch Whisky employment (SWA members) 2000 and 2008

Year Scotland Rest of UK Total

2000 9,867 1,224 11,091

2008 9,557 235 9,792 -310 -989 -1,299 Change 2000 - 2008 (-3.1%) (-80.8%) (-11.7%)

SOURCE: Scotch Whisky Association

22 Table A.3: Scotch Whisky employment by occupation (2008)

Function Employment % (1) Management (1a) Production, works and maintenance 6.0% managers (1b) Other managers 3.6% (2) Professional (2a) Science and engineering professionals 1.2% (2b) Other professionals 6.7% (3) Associate (3a) Science and engineering technicians 2.0% professional and technical (3b) Marketing and sales associates 1.3% (3c) Other associate professional and 1.2% technical (4) Administrative and (4a) Financial administration 2.1% secretarial (4b) Other administrative and secretarial 6.6% (5) Skilled trade (5a) Production and maintenance fitters 6.8% occupations (5b) Carpentry and woodworking trades 0.4% (5c) Food and drink preparation trades 0.1% 5(d) Other skilled trades 1.6% (6) Personal service 5(d) Personal service occupations 0.0% (7) Sales and customer (7a) Sales 1.1% service (7b) Customer service 3.3% (8) Process, plant and (8a) Setting, operating or attending 13.7% machinery operatives machinery (8b) Fork lift truck and heavy goods vehicle 6.1% drivers (8c) Other operatives 9.7% (9) Elementary (9a) Packers, bottlers and fillers 16.7% (9b) Goods handling and storage 7.2% occupations (9c) Cleaning and security staff 1.4% (9d) Other elementary occupations 1.3% Total 100%

SOURCE: Verso Economics survey of Scotch Whisky producers