Scotland independence: Why the Scotch industry won't be cheering for it

It would be a quite a shame if the Scots decided to separate from the UK at the risk of endangering what makes the country of deep interest to the rest of the world, or at least to India. You guessed it, we’re talking about its whisky industry. According to reports, the brewing industry is worried about the consequences of Scotland separating from the United Kingdom. Since the Royal Bank of Scotland has threatened to move base to England if the Scots separate from UK, the country might be left with the whisky as its most important industry after its oil reserves. However, the political and economic uncertainty don’t bode well for it. [caption id=“attachment_1719885” align=“alignleft” width=“380”] No reason to cheer just yet for the Scotch industry. AP image[/caption] A report on Vox states : “Like any other industry, the Scottish whisky distillers dislike economic uncertainty. And between questions about what currency an independent Scotland would use and the will-they-or-won’t-they of whether the European Union would let Scotland join, Scottish independence would bring about a lot of uncertainty. So it makes sense that the distilling industry would be wary of breaking away. The Scotch Whisky Association isn’t officially opposing independence, but its spokesperson told CNBC that “the consensus within the Scotch industry is that the potential risks outweigh the advantages.” And it’s not just the Scots who need to be anxious, Scotch aficionados from across the world should worry about the implications of the Scots separating from UK - the price of Scotch might increase manifold. “A ‘Yes’ vote will likely drive up the prices of single-malt Scotch in the short term,” Josh Green, CEO and co-founder of Panjiva Inc, a data-based global trade analysis firm, told International Business Times. He added that with the political turbulence and the renewed interest in the country, the demand for Scotch might shoot up and there’s no evidence that the industry will be able to meet the spike in demand. The prospect of increased demand, however, isn’t the biggest worry for Scotch makers’ mind right now. The Time reports that the prospect of a separation brings with a series if complications for the brewers. “Lack of certainty about Scotland’s currency, interest rate levels and membership in the European Union—which eliminates trade barriers in its largest market—all compete for the top of the list of worries,” a report on Time states. Not only will the prices of Scotch skyrocket if the country separates from UK, the spirit will be face stiff competition in the European Union markets from other liquors. The Scotch Whisky association had voiced its apprehensions about the separation and delineated the benefits of being with the UK earlier this year in a statement. In a statement issues in May, David Frost, Chief Executive of the SWA said, “In contrast, as of now, the nature of an independent Scotland’s currency remains unclear, and self-evidently this could affect our exports, management of supply chains, pricing, and competitiveness. The taxation regime also remains to be developed, and any regulatory divergence between Scotland and the rest of the UK may increase costs to business. In all these areas, we need further information and reassurance before we can assess whether we can mitigate these potential risks.” He also added that the legal framework provided by the EU was of prime importance to the industry. By the looks of it, the Scotch industry isn’t set to benefit from the separation and though they may not admit it, they may be watching the vote for independence a lot closer than others.