Government told to intervene in Scotch

20th July, 2015 by Neal Baker

A group of political activists, which includes a former Diageo executive, is calling on Scotland’s governing party to force the whisky industry to do more for the country’s economy.

Scotch whisky is not doing enough to benefit the local economy, according to the backers of the proposed motion (Photo: Wiki)

Scotch whisky is not doing enough to benefit the local economy, according to the backers of the proposed motion (Photo: Wiki)

The group claims that the industry, which creates “an extraordinarily valuable commodity”, is not benefiting Scotland in terms of jobs and investment as much as it should because of its mostly multinational ownership.

The campaigners will be attending Scotland’s governing Scottish National Party (SNP) conference in the autumn. They hope to table a motion calling on the party to set up a task force which would look at how to further develop the Scotch whisky industry’s employment potential, as well as the feasibility of changing the license regime of whisky distilleries.

The motion, which according to the Herald Scotland was submitted to the party this week, is authored by Scottish trade union official Bill Ramsay and Donnie Blair, a former Diageo strategic executive and critic of the industry. It will also ask the party to look at how get more of the revenues raised by the industry to stay in Scotland. If the motion is permitted to appear at the conference then the party will vote on whether to accept or reject its proposals.

Left-wing Scottish think tank Common Weal, which emerged during the Scottish referendum debate last year, is also backing the motion. It cites a 2013 report by Graeme Blackett of Biggar Economics that found the Scotch whisky sector has a 60% profit margin, while the direct economic benefits to Scotland from the industry is estimated at just 35% of turnover, with only 7% of profits re-invested into the Scottish economy.

Robin McAlpine, director of Common Weal, said, “The Scotch whisky industry relies heavily on Scotland’s natural resources and cultural heritage, but it’s 83% owned by foreign corporations”.

Donnie Blair, the former head of strategic affairs at Diageo, has previously described the Scotch whisky industry as “neither Scottish nor a success,” and is a harsh critic of its representative body the Scotch Whisky Association.

Blair is quoted by the Socialist Courier in 2013 saying, “Investments [by the Scotch industry] in Scotland are always presented as some kind of favour or gift to the Scottish people. In fact they are a normal cost of doing business, designed to generate even greater profits from Scotch,” which he says then go overseas to multinational owners rather than benefiting Scotland.

However, Rosemary Gallagher, head of communications at the Scotch Whisky Association, argued that Scotch is already “of major benefit to the economy”, saying that it “adds more than £3 billion in value in Scotland and a total of  £5bn across the UK.”

She told db, “The industry supports around 40,000 jobs and is the linchpin of many communities. It is known globally as a Scottish success story. Only last week the First Minister Nicola Sturgeon described food and drink, led by whisky, as the ‘darling of the Scottish economy’.”

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