RUSSIA’S RETALIATORY TARIFF HIKE ON SCOTCH AND WHAT IT MEANS

Russia has announced plans to double the import tariffs on Scottish whisky, in a move that comes as a response to sanctions by the West that were imposed due to the ongoing war in Ukraine. This tariff hike is aimed at “hard liquor from unfriendly countries,” and targets spirits from the UK and other NATO and EU member states.

The new import duty is set to be 20% of the value of spirits, with a minimum of €3 per litre. This is a significant rise from the current duty rate, which ranges between €1.40 and €1.50 per litre. As well as this, import taxes on wines from “unfriendly countries” will increase to 25%. These tariff increases are also a strategy by Russia to boost domestic production and generate further revenue for the Russian state.

Despite the conflict in Ukraine, millions of pounds worth of Scottish whisky continue to be exported to Russia on an annual basis. Brands like Johnnie Walker remain popular, even as other big name producers have left the Russian market. The Scotch Whisky Association (SWA) reported a 54% decrease in direct exports to Russia since the war began. A bottle of Johnnie Walker Red Label, for instance costs about £15 in Russia, whilst a local brand might sell for just £4-£5. 

Latvia has been a key gateway for whisky and other spirits into Russia of late, with the UK exporting beverages to Latvia which totalled £117 million last year, with much of it then sent Russia.

As Russia continues to push forward with counter-sanction measures, the global trade dynamics of luxury goods like Scotch whisky will undoubtedly evolve. For now, the industry watches closely, adapting to each new twist in the geopolitical landscape.