the scotch whisky association · the scotch whisky association sir henry ross (distillers company...

The Scotch Whisky Association

A century of protecting and promoting Scotch Whisky


A century of achievementOne hundred years ago Scotch Whisky companies recognised the need to establish an association that would represent, protect and promote the interests of brand owners and producers. Their concerns were taxation, pricing, alcohol’s place in society and recognition of the economic importance of Scotch Whisky.

The industry continues to value a strong association to handle many of the same issues. Their trust in the Scotch Whisky Association is testament to the hard work and dedication of the staff employed by the SWA over the last 100 years.

The Association has had only six Chief Executives. They and their staff have made the case for fairer excise duty with 30 Chancellors of the Exchequer, taken legal action against thousands of fake whiskies, challenged tax and tariff discrimination overseas and helped the industry through war controls and prohibition.

The Association embodies industry unity. Common purpose has overcome war and post-war restrictions of cereals, tax

discrimination by Japan, Korea and Chile in the 1990s, secured strong regulations on the definition of Scotch Whisky, protected Scotch as a drink coming only from Scotland, negotiated climate change agreements since the early 2000s and launched in 2009 an environmental strategy that will sustain the industry going forward.

As the SWA enters its second century, the industry is in good heart. Exports of Scotch Whisky have grown in value by 100% in the last ten years as younger and aspirational consumers in Asia, Latin America and Africa have made Scotch Whisky their drink of choice. There is investment in production capacity to meet growing global demand.

Many challenges remain but the current SWA team is well placed to tackle these on behalf of the industry. I am sure that those who follow us will see a strong Association through for another hundred years.

I should like to thank David Williamson for chronicling the history of the Association in this book so that our story is rightly told and recognised.

Gavin HewittChief Executive

Protecting and Promoting Scotch Whisky

The Early YearsFrom a Royal Commission which aimed to agree ‘what is whisky?’ to falling sales in the home market, the early 20th century was a challenging time for Scotland’s distillers.

The situation was compounded by higher taxes announced by the government. Lloyd George’s 1909 ‘People’s Budget’, for example, dramatically raised taxes, including a 30% increase on whisky, to help fund the government’s social reform programme.

Against this backdrop, through the summer of 1912, a series of conferences were held between whisky proprietors and distributing associations, culminating in a major gathering at London’s Cannon Street hotel on 3 October 1912.

With the discussion chaired by James Stevenson (John Walker & Sons Ltd), the companies were unanimous in their decision. That day it was agreed the Wine & Spirit Brands Association should be formed to help protect and promote the sector.

Sadly, little remains of the Association’s early records. What we do learn, however, is that the first chairman was William Harrison (James Buchanan & Co Ltd), a position he would hold for the best part of twenty years over two separate tenures. The subscription was fixed at £5 5s a year (equivalent to £510 today) and the first secretary was James King Stewart, based at Mark Lane in London, who had close connections with a whisky blending firm. He would remain secretary until 1940.

Most of the organisation’s first decade was dominated by issues in the home market and the impact of the First World War. The new trade body had to respond to various pressures, not least a Central Control Board set up to regulate the drinks trade, production

Left: The Association’s list of protected brands (1913)Top: Lloyd George


capacity being diverted to making high-strength alcohol for munitions, and loud calls for alcohol sale restrictions.

From February 1913, it also introduced a list of ‘protected’ whisky brands. Each member agreed to recommend a uniform price per brand. If a retailer cut prices below that level, the Association would issue a notice that supplies should be halted. The scheme would remain in place until 1956.

Whilst the trade emerged from the war with new minimum maturation and alcoholic strength rules in place, and domestic prohibition was avoided, it had already become clear that a stronger body focused on whisky alone was needed.

As a result, in May 1917, the organisation evolved into the Whisky Association, representing both Scottish and Irish producers. Now based at Fenchurch Street in London, the new organisation divided itself into

home trade and export sections.

The Wine & Spirit Trade Record would report that the aim of the change was ‘the creation of a strong, centralised, homogenous body in London, the seat of government, which will be capable of adequately voicing the opinions and defending the interests of all Scottish and Irish whisky distillers, blenders and exporters.’

Those present at the inaugural meeting are a roll-call of famous whisky names. The President was John Dewar (by then Lord Forteviot), with individuals such as Peter Mackie, George Paterson Walker, James Buchanan, William Ross, Sir Robert Usher, and Andrew Jamieson all lending their support.

The first chairman of the new organisation would be Robert Montgomery (McConnell’s Distillery Ltd). However, it was William Ross (Distillers Company Ltd), memorably described as the Abraham Lincoln of the whisky trade, who would emerge as the driving force behind the new Association. What archives exist reveal a focus on easing state intervention in the trade, reducing high taxes and

John Dewar (Lord Forteviot)

James Stevenson


the local temperance agenda. The Association would also successfully fight revenue-raising measures aimed at the sector, including proposals to introduce export and foreign barley taxes.

More entertainingly, the Association and 40 companies would co-operate on the industry’s presence at the 1924 British Empire Exhibition. The result was a specially constructed mock 15th century baronial castle, complete with spiked portcullis, promoting Scotch Whisky.

Disappointingly, whilst there are records that show the Association was already active in relation to protecting Scotch Whisky in the USA from the mid-thirties, there is little that gives an insight into how the Association responded to such challenges as the Volstead Act and US prohibition.

Instead, it is not until 1939 that the Association’s detailed records start, just before a major milestone in its history.

An Association for a new age The Second World War re-shaped the Scotch Whisky industry. The issues were fundamental; could whisky even be made at a time of shortage and to what extent could it be exported to support the hard pressed British economy.

Of lesser importance but pivotal to the trade body’s history was the 1942 decision to re-constitute as the Scotch Whisky Association, following a special meeting at Edinburgh’s Caledonian hotel. With Irish distillers now omitted from membership, the secretary would be Percy Hogg, later described as having ‘legal acumen and dedication to the gospel of hard work, combined with a personality that was at once engaging and formidable’. Hogg and the new SWA would immediately become involved in intricate negotiations with government arguing that it was in the national interest to allow distillers to use scarce cereal supplies. Hogg

has the unique distinction of subsequently sitting on the SWA Council, having been invited to join the Haig board on his retirement.

Henry Ross

William Ross


Sir Henry Ross (Distillers Company Ltd), son of William Ross, would chair the Association between 1945 and 1958. Looking back, he would say that 1947 was

‘the greatest moment for the Association and the industry as a whole’,

with action needed ‘in order to guard the very existence of the industry.’

In the end, under the so-called Strachey regime, annual export targets to ‘hard currency’ markets would be agreed with government until 1953, with unrestricted access to cereals resuming from 1950. As one Minister recognised ‘the country needs food, dollars mean food, and whisky means dollars.’

In his 1951 speech to the AGM, Ross clearly articulated the new SWA’s focus as ‘to protect the industry’s interests in the overseas markets, first by

seeking legal recognition and enforcement of the principle that Scotch Whisky can only be made in Scotland and, secondly, by fighting

acts of discrimination by foreign governments which result in Scotch Whisky being placed in an unfair competitive position.’ When it comes to the Association’s international work, little has changed.

Opening up the worldFirst through necessity, then driven by opportunity, the industry turned its attention to export markets in the fifties and sixties. Tackling tariff and non-tariff barriers to trade would win the Association an international reputation for its market access expertise.

Much of the early attention was on growing exports to recovering

Left: Spokane Daily Chronicle - Oct 10, 1944 Top: Taking Scotch Whisky to the worldBottom: Protection of Scotch Whisky in China agreed


European economies and the Americas. France, for example, only gradually returned to allowing pre-war levels of imports. Occasionally more unusual methods were used; such as negotiations aimed at a barter deal involving imports of coffee in exchange for whisky exports to Colombia. The international work would evolve into global campaigning against trade barriers as the sector tackled protectionism and sought to take advantage of new opportunities, particularly in Asia.

From the 1970s, there was also hard work done to ensure the European Common Market delivered commercial benefits to distillers, with important cases on unfair taxation in the likes of France and Italy pursued. Efforts over the last thirty years to remove trade barriers in Greece, Spain and Poland as they negotiated entry into the EEC have paid equal dividends.

In parallel, the Association consistently engaged with trade negotiations. The 1994 ‘zero for zero’ tariff agreement involving Europe, the USA, Japan,

and Canada was a major achievement, whilst there was also pioneering work on the use of the GATT international trade rules to tackle tax discrimination in Japan, South Korea and Chile. The 1996 WTO panel ruling on Japan was,

for example, historic and the culmination of a tenacious 25 year campaign of cajoling, persuasion, and negotiation.

The case law has helped put into practice the principle that imported and domestic spirits should be taxed and treated in a similar way. Much of the last 20 years has been spent ensuring those same principles are respected in emerging markets such as India, the Association’s top international priority, and in the EU’s free trade agreement negotiations with countries around the globe. It has also seen a concerted effort to help open up new opportunities in China and Turkey for member companies.

Imitation: neither flattery nor toleratedIn parallel, the post-war period witnessed an Association that became increasingly active in seeking better protection for ‘Scotch Whisky’ in national laws, international agreements,

An early SWA legal action

India grants the Scotch Whisky geographical indication


and through legal action. That work has remained remarkably consistent over time; with the constant goal to protect Scotch from unfair competition.

As early as the 1950s, the unincorporated SWA was litigating to protect Scotch Whisky in markets such as France. However, the right of the unincorporated SWA to recover damages as a civil party was called into question. This resulted in the incorporation of the SWA in 1960, with the right of the Association to take legal proceedings to protect the Scotch Whisky trade subsequently recognised by the likes of the French Supreme Court.

There was also considerable debate around the need to prevent the export of immature spirit as whisky due to the risks to the category’s reputation. This prompted a rare vote at the 1952 annual general meeting, with members voting 106 to 0 to oppose the practice.

It is important to understand that those handling the early protection of Scotch often broke entirely new legal ground. Recognising that geographical descriptions were protectable was a new concept, albeit the concern was old; if imitations are widely sold, the description ‘Scotch Whisky’ becomes generic.

Looking back, it is clear that those setting up the SWA’s legal activities were far sighted in recognising that threat. As a result, no court in any country has ever ruled that ‘Scotch Whisky’ is generic. In total, the SWA Council has authorised legal action against over 1,000 brands and nearly 3,000 trademarks worldwide have been opposed.

Today, at any one time, up to 70 different legal actions around the world are being pursued. Such legal work is often a long term effort, with the longest case thought to be a trademark opposition in India that

The SWA has taken action against over 1,000 fakes


began in 1964. ‘Highland Chief’ was still under appeal 27 years later when agreement was reached. Less seriously, the Association lawyers have found themselves pursuing a Filipino producer who had claimed to invent unique technology that meant 35 minutes of vigorous shaking in Manila equalled 35 years of maturation in Scotland. There was also an Indian case, where a producer argued he had named his brand ‘Scotch Terrier’ out of love for a pet rather than any attempt to misuse Scotch Whisky’s international reputation.

There have of course been many more important cases pursued. Whilst it is hard to pick out any one individual case, a significant milestone was the 1970 UK court judgment in the Henry Ost & Co Ltd and Vinalco SA case.

This action followed on rulings in the ‘Champagne’ and ‘Sherry’ cases, which confirmed for the first time that groups of producers in the relevant regions had a common right to prevent misuse of their geographical descriptions. The Ost action went further, in that the plaintiffs were suing a UK company in the English High Court for its part in passing off of an admixture as genuine Scotch Whisky in Ecuador.

For those who enjoy a dram, it is perhaps surprising that there has been significant energy expended in securing a proper definition of what is in your glass. It took many hours of unglamorous, detailed negotiation in

London and Brussels to secure a robust whisky definition in UK and European law, protecting traditional practice and the integrity of the category.

Whilst the 1908-09 Royal Commission examined the question of what is whisky, the first definition of Scotch Whisky in UK law was not agreed until 1933. It then took until 1988 to secure a private members’ bill at Westminster that could deliver a dedicated Scotch Whisky Act. Agreement was also reached that year on a European spirits regulation that recognised the Scotch Whisky geographical indication (GI) and secured an acceptable whisky definition. As a result, the then chairman David Connell (John Walker & Sons Ltd) would declare 1988 as ‘one of the most successful in the history of the Association.’

Today’s work on GI protection in emerging markets continues to put the SWA in the vanguard of breaking new legal ground. Such protection has been secured in markets from China to India, Malaysia to Turkey, Vietnam to Panama.

The Association’s recent history saw passionate debate over the definition and labelling of whisky re-surface in 2003 and 2004. Whilst challenging for the organisation, the debate over the labelling changes to a malt whisky


brand demonstrated again the benefit of a strong trade association. Despite strongly held opposing views, members were able to reach agreement on a way forward within and through the Association. That might have disappointed headline writers but it also led to landmark new Scotch Whisky Regulations being put on the statute book in 2009. It took 97 of the Association’s 100 years but there are now comprehensive rules in place.

Tax and whisky gang the githerLike its legal protection work, the SWA has been tenacious on the question of excise duty. The case for tax reform has been made to over 30 Chancellors, from Winston Churchill to George Osborne. That case has been admirably consistent. The 1923 Budget submission to Stanley Baldwin, for example, still resonates today, arguing that higher taxes on Scotch would promote other drinks, set an unwelcome precedent that would be

copied overseas, and damage the supply chain.

Unfortunately, the industry has too often been seen as a source of unlimited tax revenue and capable of sustaining ever higher duties. The industry has also suffered because as William Reid (John Haig & Co), the SWA chairman, said in 1959,

‘the one thing our case lacks is the ability to gain votes in marginal constituencies.’

That said, the Treasury has conceded the strength of the industry’s case for a fairer duty system where all alcohol is taxed on the same basis, depending on alcohol content. Echoing previous Chancellors, on cutting the tax for the first time in 100 years, Ken Clarke noted that the ‘high rates of duty at home have made it difficult for the Scotch Whisky industry to press their excellent case for lower duty rates in other countries.’ The following decade, Gordon Brown committed ‘to delivering a fairer balance in the burden of taxation falling

Toasting new Scotch Whisky Regulations with Scottish Secretary 2009

Ken Clarke delivers the Budget with a dram


The SWA makes its case direct to the Prime Minister


Top: 66% Pure Tax, highlighting the duty impact to the ChancellorMiddle: MPs visit the SWA political conference standBottom: Nick Clegg, Deputy Prime Minister, visits Speyside


on different alcoholic drinks.’ Whilst excise duty has only been cut twice over the last century, spirits duty has been frozen in 15 of the last 30 years.

Over time, the Association has become a well-respected advocate for the industry. By the late-1960s, a ‘Scotch Whisky Centre’ had been opened in London to help outreach to MPs and the media. This was followed by the establishment of an all-party group on Scotch Whisky issues as early as 1972 and wide engagement across Whitehall. More recently, the Association has also had to develop its advocacy in both the Scottish and European Parliaments.

A presence at party political conferences from 1985 also raised the Association’s profile, with the SWA reception becoming a hot ticket and its award winning stands conveying the tax message in often memorable ways. One conference ‘give away’ is still remembered today, with a one third full miniature of Scotch labelled ‘Scotch Whisky 66% Pure Tax’ reminding delegates that the missing spirit – two thirds of the bottle – went to the Chancellor in duty.

Seeking a light touch to regulationThe Association’s goal on regulation remains the same today as it did in 1912; it should be fair, proportionate, and effective. The volume of its regulatory work has, however, grown dramatically. This was particularly the case following the Association’s move to its current home at Atholl Crescent in Edinburgh. Under Bill Bewsher, who became secretary in 1973, taking over from James Woodhouse (secretary since 1946), the added complexity of the work led to a gradual expansion of the organisation’s secretariat. Today, it is nearly 40 strong. The impact of joining the Common Market, metrication, water issues, customs & excise, and health & safety are all

20 Atholl Crescent, Edinburgh (SWA’s home since 1973)


areas where the Association has had to devote years of effort to ensure the right result for the industry.

Operational issues evolve but are rarely new. With such issues only limited by the imagination of the regulator, the benefit of industry collaboration through the Association has always been clear.

In the seventies, significant time was devoted to securing important export refunds, saving members’ half a billion pounds over the scheme’s lifetime. Twenty years later, the then Director General Hugh Morison would have to prevent a costly scheme that would have required ‘hazard warning labels’ on every cask and to agree a balanced approach in new climate change

legislation. More recently, considerable time and effort was required to ensure that the introduction of tax stamps in the UK was not overly burdensome on producers. The campaign – an effort involving SWA technical, public affairs and legal teams – helped to mitigate the introduction of stamps to the tune of £50m a year, a sum equivalent to annual whisky exports to Canada.

In operational issues, the Association has supported its members by taking a long term view. This has been evident in providing vocational training for members’ operational staff and complimented by financial support provided to the International Centre for Brewing & Distilling at Heriot Watt University to underpin fundamental research and skills in the sector.

Looking forward, it is clear that the Association’s environment agenda will only increase in importance. Development of an industry environment strategy in 2009, setting targets up to 2020 and 2050, was a major collective effort and will continue to shape the sector and industry investment for many years to come.

Industry sustainability is also impacted by the Association’s involvement in promoting more responsible attitudes to alcohol. The debate on alcohol’s place in society is not new. As far back as 1919, records show the organisation concerned about the threat of local prohibitionist legislation

Matured to be Enjoyed Responsibly

3rd Edition 2012

Scotch Whisky IndustryEnvironmental Strategy

Report 2012

Sustaining the environment, employment and responsible drinking


in Scotland. Today’s campaigning for more proportionate policies than state intervention in pricing shows how the debate continues and evolves.

The Association has actively promoted social responsibility for the best part of 40 years. Over that period, academic research on alcohol misuse has been supported and training of GPs, medical students, and nurses on alcohol issues financed. This included a five year £80,000 grant to Edinburgh University to research comparative attitudes to alcohol.

More recently, a far reaching industry code of practice on responsible marketing and promotion was launched, whilst the SWA has been instrumental in setting up a partnership with government aimed at encouraging responsible drinking.

A global audienceInevitably, a trade association spends most of its time supporting the ability of member companies to make, trade, and promote their brands. Fair treatment at home and abroad is the goal. The Association has, however, a long history in promoting Scotch Whisky. The first press officer, Philip Gee, was appointed in the 1940s. One of his first acts was to commission an educational Movietone film on whisky for £2,000, which would be widely

distributed internationally. He would also be instrumental in setting up a lecture panel, which over the years would hold hundreds of events and involve such luminaries as Bessie Williamson (Laphroaig distillery) talking about the sector.

The PR efforts were diverse and often surprising. Take, for example, support for the film ‘Whisky Galore’ or the high profile campaign in Canada that included sponsorship of the ‘Scotch Cup’, which became the pre-eminent competition in world curling in the 1960s.

From that period, information and promotional work was considerably expanded. Such was the diversity of activity that the Association could be found equally at home at the Royal Highland Show and the Venice Film Festival. Some events stand out more than others, such as a whisky tasting for ‘models and mannequins’ in Copenhagen. An Association film ‘Time was the Beginning’ would be seen by an international audience of millions as part of a package including James Bond’s outing in ‘Live and Let Die’.


The increasingly global nature of the industry would later be reflected by the SWA’s generic Scotch Whisky campaigns in the USA and Japan. Information centres in New York and Tokyo were complimented by in-store activities, promotional films, and media visits, as well as some more off-beat initiatives. The only professional female American bagpiper was a campaign spokeswoman, whilst the campaign also featured a Scotch Whisky song, ‘Highland House’ parties, and a ‘Scotch caravan’ which travelled across the United States.

It was also shown by the SWA’s celebration of Scotch Whisky’s 500th anniversary in 1994. That year’s programme included a memorable launch party on the Royal Yacht Britannia in New York harbour, events from Sao Paulo to Tokyo, and a Scotch Whisky Day in Scotland.

Whilst today’s Association does not have a generic promotional role, its information seminars and events, such as the centenary exhibition at the Scottish Parliament, continues a tradition of supporting members’ brand activities at industry-level.

One century on, the Association is in good heart, protecting and promoting a sector that is flourishing overseas to the benefit of the economy at home.

Taken together, the history of a trade association sheds light on the industry it represents. The SWA’s history reflects the history of the Scotch Whisky industry over the last 100 years. Its past helps us to understand what the future might hold for one of Scotland’s most important and iconic industries.

The Association has represented its members in times of growth and decline, recession and renaissance. Much has changed; not least it took until 1952 for Ethel Robertson (Robertson & Baxter), to become the first woman to attend the AGM. Yet there is also a remarkable continuity in the Association’s history, with only six chief executives and eighteen chairmen in the past century. The themes they have grappled with are constant; fair treatment on tax, exports, protection, and operational issues.

A small and committed SWA team has worked closely with dedicated company staff, who give their time freely


to support industry-level activities, to shape the sector as we know it today. Indeed, through its work to establish the European Spirits Organisation and the World Spirits Alliance, and its work with other spirits associations, the SWA has also played an important role in shaping the wider international spirits industry over many years.

Within the Association, the industry continues to show great unity of

purpose. That has consistently prepared the ground for industry success and resulted in a trade association with an international reputation for its representation of the sector.

The name might have changed since 1912 but the need for a strong trade association representing the Scotch Whisky industry remains the same.

Scotch Whisky: From Grain to Glass, the SWA Centenary Exhibition, Scottish Parliament

For the Centenary of the SWA Poem by Liz Lochhead, Scots Makar


Chairmen of the Council of the Association William Harrison, James Buchanan & Co Ltd (1912–1917)

Robert Montgomery, McConnell’s Distillery Ltd (1917-1922)William Ross, Distillers Company Ltd (1922-1925)

William Harrison, James Buchanan & Co Ltd (1925-1939) Tom Wilkinson, John Haig (1940-1945)

Sir Henry Ross, Distillers Company Ltd (1945-1958) William Reid, John Haig (1958-1961)

Sir Ronald Cumming, James Buchanan (1961-1967) Sir Alex. McDonald, Distillers Company Ltd (1967-1976)

J. Robert (Robin) Cater, John Haig (1976-1983) John Macphail, Robertson & Baxter Ltd (1983-1988)

David Connell, John Walker (1988-1991) James Bruxner, Justerini & Brooks (1991-1995)

John McGrath, IDV/UDV (1995-2000) Sir Ian Good, The Edrington Group Ltd (2000-2005)

Richard Burrows, Pernod Ricard (2005-2007) Paul Walsh, Diageo plc (2007-2011)

Ian Curle, Edrington (since January 2012)

Head of Association SecretariatJames King Stewart (1912-1940)

Percy Hogg (1940-1946) James Woodhouse (1946-1973)

Bill Bewsher (Director-General & Secretary, 1973-1994) Hugh Morison (Director-General, 1994-2003)

Gavin Hewitt (Chief Executive, since October 2003)


Registered Office of the Association20 Atholl Crescent Edinburgh EH3 8HFt: 0131 222 9200 f: 0131 222 9237e: [email protected]: www.scotch-whisky.org.uk

London Office14 Cork Street, London W1S 3NS

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