China has announced a cut in import tariffs on UK-made whisky, including Scotch, in a move expected to support British exporters and revive sales in one of the world’s fastest-growing premium spirits markets. The decision follows a recent visit to Beijing by UK Prime Minister Keir Starmer.
China’s Ministry of Finance confirmed that from February 2, whisky imports from the UK will be subject to a reduced tariff of 5%, down from the previous 10%. The announcement came after bilateral discussions between Prime Minister Starmer and Chinese President Xi Jinping on January 29.
The UK government estimates the tariff reduction could add £250 million (US$344 million) to the British economy over the next five years. The move is intended to strengthen the competitiveness of Scottish distillers and other UK whisky producers in China’s premium spirits segment.
Industry Welcomes the Decision
The Scotch Whisky Association (SWA) welcomed the announcement, describing China as a key growth market for Scotch producers. SWA chief executive Mark Kent said Chinese consumers have developed a strong understanding of and appreciation for premium Scotch whisky. He added that reducing tariffs from 10% to 5% could help reignite export momentum.
According to SWA figures, China ranked as the 10th-largest market for Scotch whisky by value in 2024, with exports totaling £161 million. While this marked a 31.5% decline compared to 2023, exports to China have increased by more than 81% since 2019.
By volume, China also ranked tenth in 2024, with 30 million bottles shipped. This represented a slight 1.7% year-on-year decline, but a significant 77.3% increase compared to 2019 levels.
Potential Recovery for UK Whisky Producers
The tariff cut applies to all UK-produced whiskies, including Scotch, Welsh, and English whisky, but does not extend to other British exports.
Stephen Davies, chief executive of Penderyn Distillery in Wales, said trading conditions in China had been challenging over the past year but welcomed the reduction in import costs. He expressed optimism that the market could recover to earlier peak levels.
The English Whisky Guild has also been approached for comment on the development.
Part of Broader Trade Efforts
The agreement follows another major trade breakthrough last year, when the UK and India agreed to reduce tariffs on whisky and gin from 150% to 75%, with further cuts planned over the next decade.
Industry analysts note that while short-term gains from the China tariff cut may be limited due to current market conditions, the move positions UK whisky producers for stronger long-term growth as Chinese consumer demand rebounds. China remains a strategically important market for premium spirits brands seeking expansion beyond Europe and North America.
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