Scottish Secession a Sobering Prospect for Scotch Whiskey Drinkers

Even a temporary interruption would be "damaging and difficult to manage."

ByABC News
September 16, 2014, 1:41 PM

— -- Scotch drinkers might want to brace themselves if Scots vote to secede from the United Kingdom and, consequently, the European Union Thursday.

Among the likely outcomes would be higher prices for Americans and others who import the brown elixir from secession saddled producers with rising costs.

Scotch whiskey, commonly referred to as Scotch and spelled without the "e" in Great Britain, is a tightly regulated spirit that can only come from oak casks that have matured for at least three years in Scotland. Exports are a giant piece of business for the Scotch industry, which says it ships 40 bottles overseas each second, while Scotch accounts for a quarter of U.K.'s food and drink exports.

The prospect of a Scotch trade interruption alone is enough to rattle the industry.

David Frost, the chief executive of the Scotch Whisky Association in Edinburgh, said "any regulatory divergence between Scotland and the rest of the U.K. may increase costs to business," according to his group's annual review in May.

And Frost isn't just bluffing. In the European Union, Scotch producers can export the stuff tariff-free to the region, and the geographical indication of "Scotch Whisky" is protected by E.U. law. Only 109 distilleries are licensed to produce Scotch, according to the association.

"But even a temporary interruption of E.U. membership involving exclusion from the single market or the customs union, if this were a consequence of independence, would be damaging and difficult to manage," Frost wrote in the annual review.

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In a statement provided by a spokeswoman to ABC News today, the association said it is "committed" to working with the government no matter what transpires Thursday. Through consultation of its members, the association detailed what it values from the government: "a supportive business environment, continuity of EU membership, and support for our exports."

The group is understandably nervous, citing 35,000 jobs it says depend on the Scotch industry.

"We see potential risks to these from an independent Scotland,” the statement from the trade group read, “and we look for reassurance that any future arrangements would be at least as supportive as the current ones.”

PHOTO: A still made from the "Our choice between two futures..." ad posted to YouTube by Yes Scotland on Sept. 8, 2014.
A still made from the "Our choice between two futures..." ad posted to YouTube by Yes Scotland on Sept. 8, 2014.