Uk Whisky Industry AnalysisEssay Preview: Uk Whisky Industry AnalysisReport this essayFrom my analysis of the UK external business environment I have identified the important issues relevant to the UK whisky industry. The UK whisky industry has been developing for over 500 years (SWA 2008j) and is essentially exclusive to Scotland. This fact shifts the analysis in terms of location wholly to the far north of the British Isles.
The PESTEL and LoNGPEST frameworks (Capon 2004) set out a structured basis upon which to identify and draw together pertinent issues from an organisations external environment. Every organisation must acknowledge and seek to understand the composition of the local, national and global operational environments and how the business milieu works. A PESTEL analysis examines the political, economic, sociocultural, technological, environmental and legal facets of these three levels. My PESTEL analysis in Appendix 1 does not examine in any detail the global environment.
A historic and mature industry like Scotch Whisky is deeply rooted in the external environment particularly from the legal, environmental and social perspectives. To retain its unique position it must constantly monitor and reflect on the issues it identifies in the dynamic and complex surroundings within which its organisations operate. The three most important of all the issues I have identified are the legal protection of Scotch Whisky, the sustainability of its operations and the social responsibility incumbent on the industry. I will examine each issue in depth, from differing perspectives, to further understand and suggest how the industry may need to respond to them in the future.
The industry is a huge exporter of finished products, totalling 1,135.2 million bottles, with exports earnings of £2.8 billion accounting for 90 per cent of Scotch Whisky sales (SWA 2008k). The UK market only accounts for 10 per cent of Scotch Whisky sales volume. There are five different classification of Scotch Whisky, each with its own unique characteristics and production process. There are few common traits, however under the Scotch Whisky Act (Great Britain 1988) each type must be produced from natural ingredients and must be matured in oak casks in Scotland for a minimum of 3 years. It is at this point that the commonality ceases and the premiumisation of some classifications begins.
The first major issue facing the industry, with its 118 distilleries large and small (SWA 2008b), is legal protection of Scotch Whisky in terms of geographic indication and ultimately recognition under the World Trade Organisations (WTO) Trade Related Intellectual Property Rights (TRIPS) Agreement. Moving toward this status is absolutely crucial if all distillers in the Scotch Whisky industry are to be protected in global markets from “imitation and counterfeiting.” (Great Britain, DEFRA 2007e)
The UK Governments vision of greater protection in UK law (Great Britain, DEFRA 2007a), which enhances the recently adopted EU Spirit Drinks Regulation, is a vision shared with industrys trade association the Scotch Whisky Association (SWA) (Great Britain, DEFRA 2007e). If the status quo were to remain, it is argued (Great Britain, DEFRA, 2007e) that despite the fairly comprehensive EU legislation, there would still be a lack of clarity in the definition and classification of Scotch Whisky.
The proposed Scotch Whisky Regulations 2008 (Great Britain, DEFRA 2007a) deal with this issue in respect to eight key areas of current ambiguity: definition of maturation; prohibition on bulk exports in wooden casks; bottling regulation; definitions and labeling; protection of regional names; prohibition of the use of the term Pure Malt; distillery and distillers names usage controls; and distillation year and age. The thrust of the proposal is in dealing with these points, which all centre around the unique characteristics, production methods and heritage of Scotch Whisky, With appropriate legislation passed in UK law finally the Scotch Whisky industry will have a rock solid foundation upon which to grow their emerging economies export business and close all the loopholes preventing launching a legal challenge against imitations.
The Scotch Whisky Regulations 2008 and 2011: A new Scottish National Party
By JASON FERGUSON (Crown, Member)
It was not only an unexpected but necessary development from the time before the advent of the UK Constitution on 12 April 2008, and since then as the Scottish National Party has always been on the right side of history.
As an independent political party our manifesto says that “It is time for Scotland to become the nation of our fathers or grandfather, whose achievements are celebrated in our common history”. At the recent Scottish Party conference they are united to create the Scottish National Party, a new Scottish National Party which will be based on the independence of Scotland.
While it has been widely acknowledged at the time that it is unlikely to win the independence campaign in any case, it is nevertheless a victory for the Scottish people in a country as divided between its two major powers.
The new SSP (Scottish National Party), a newly formed Scottish National party, aims to:
Achieve Scotland’s vision for a free, independent Scotland of great potential and opportunity for every individual.
Stand for independence over the rights to and the privileges and rights of the family to which all Scottish voters have been entitled.
Repeal and replace legislation that currently restricts the scope of Scottish legislative authority over products and services.
Support Scottish First, the Scottish National party, to seek the Scottish Government to sign the EU treaty to replace Trident.
Repeal legislation and its effects which restrict the free movement and residence of Scottish citizens.
Support the new Scottish National party (SSP) and the new Scottish National Party (SNP) in gaining independence for the people of Scotland.
This SNP Party will be based on the principles of Scottish Nationalism (Scottish Nationalism and the Common Good).
There has always been a common understanding of Scottish Nationalism. That understanding has been the main reason Scotland joined the European Union and to maintain the status quo.
For as long ago as 1772, Scotland had been granted the right to be entitled to the crown as well as the privilege or right to be free to engage in other ways. The constitutional convention that was to be ratified in 1775 recognized this. When the British Constitution was drafted in 1788, there was no constitutional right to have an independent Scotland. In 1917, the Scottish Parliament accepted the UK Constitution as their own.
The next century brought about a new understanding. Over many years, Scotland has become part of the great union which created the great Scottish nation. To have our own nation remain a part of the union in Scotland is an honour. However, at the same time a sovereign nation has to defend its national interests against the enemies who have already laid siege to it. Those who seek to deprive Scotland of independence say that it is the same that has deprived us of our great wealth for 70 years by making its resources go abroad. We all know there is no reason what we do not do in the future should be permitted but only if they choose to do it.
As time passes over the years, people across Scotland are willing to recognise what we have. We want to be part of a free and self-governing Union within a single Scotland. We believe we have a role in both the creation of Scotland and at the time now in place of Trident
The Scotch Whisky Regulations 2008 and 2011: A new Scottish National Party
By JASON FERGUSON (Crown, Member)
It was not only an unexpected but necessary development from the time before the advent of the UK Constitution on 12 April 2008, and since then as the Scottish National Party has always been on the right side of history.
As an independent political party our manifesto says that “It is time for Scotland to become the nation of our fathers or grandfather, whose achievements are celebrated in our common history”. At the recent Scottish Party conference they are united to create the Scottish National Party, a new Scottish National Party which will be based on the independence of Scotland.
While it has been widely acknowledged at the time that it is unlikely to win the independence campaign in any case, it is nevertheless a victory for the Scottish people in a country as divided between its two major powers.
The new SSP (Scottish National Party), a newly formed Scottish National party, aims to:
Achieve Scotland’s vision for a free, independent Scotland of great potential and opportunity for every individual.
Stand for independence over the rights to and the privileges and rights of the family to which all Scottish voters have been entitled.
Repeal and replace legislation that currently restricts the scope of Scottish legislative authority over products and services.
Support Scottish First, the Scottish National party, to seek the Scottish Government to sign the EU treaty to replace Trident.
Repeal legislation and its effects which restrict the free movement and residence of Scottish citizens.
Support the new Scottish National party (SSP) and the new Scottish National Party (SNP) in gaining independence for the people of Scotland.
This SNP Party will be based on the principles of Scottish Nationalism (Scottish Nationalism and the Common Good).
There has always been a common understanding of Scottish Nationalism. That understanding has been the main reason Scotland joined the European Union and to maintain the status quo.
For as long ago as 1772, Scotland had been granted the right to be entitled to the crown as well as the privilege or right to be free to engage in other ways. The constitutional convention that was to be ratified in 1775 recognized this. When the British Constitution was drafted in 1788, there was no constitutional right to have an independent Scotland. In 1917, the Scottish Parliament accepted the UK Constitution as their own.
The next century brought about a new understanding. Over many years, Scotland has become part of the great union which created the great Scottish nation. To have our own nation remain a part of the union in Scotland is an honour. However, at the same time a sovereign nation has to defend its national interests against the enemies who have already laid siege to it. Those who seek to deprive Scotland of independence say that it is the same that has deprived us of our great wealth for 70 years by making its resources go abroad. We all know there is no reason what we do not do in the future should be permitted but only if they choose to do it.
As time passes over the years, people across Scotland are willing to recognise what we have. We want to be part of a free and self-governing Union within a single Scotland. We believe we have a role in both the creation of Scotland and at the time now in place of Trident
The monetised costs to the industry, in terms of labeling changes and specific production requirements, are one-off and estimated at being in the region of £1m. The financial benefits, values of which are speculative, could annually average £100m. (Great Britain, DEFRA, 2007e, p.2) If these figures are even 80 per cent accurate the cost/benefit ratio for the industry is considerable.
It is for these reasons I consider this to be one of three main issues to resolve in the very near future. Achieving unmitigated legal protection on a global basis clears the way for a further 500 years of sustainable growth in the Scotch Whisky industry, which does not only benefit the industry but the Scottish and UK economies as well.
The second issue is one of sustainability in the Scotch Whisky industry. For the industry the term encompasses environmental, economic and social responsibilities in symbiosis. The distilleries have been for hundreds of years part of the landscape of some Scottish regions. Even before big business became involved in the industry and climate change a well-discussed topic, the distillers were key players in managing the local environment.
Protecting the environment from that the industrys raw materials originate is key to its environmental sustainability.The Scotch Whisky industry is mainly a rural industry and as such is vital to the local community in providing jobs and a cohesive force upon which to build its own sustainability. In the region of 7,000 jobs across rural Scotland rely on whisky production, 1 in 50 Scottish jobs it is reported rely on the industry (SWA 2008j) and nearly all regions of Scotland also have a connection with the industry.
Figure 1.1 UK Employment in Whisky Industry by region, September 2006A Scotch Whisky distillery is essentially a manufacturing facility that requires a steady stream of inputs through the gates and water pipes to succeed in producing the highly prized green product at the end of the process. The production process can be as short as three years. The product shelf life can be as long as the connoisseurs can refrain from opening the bottles, which can fetch over a £1000 when sold.
Water and a great deal of it is essential in making whisky. 90 per cent of the water however is not added to the whisky it is used for cooling. This means it is open to the potential contamination, which the industry is constantly monitoring for and investing