Published in Whisky Magazine Issue 52 on 30/11/2005.

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Chinese New Year?

As we enter 2006, China and the environment are going to be key issues for the world of whisky

If 2005 was a roller coaster year for whisky, strap yourself in for the ride of your life in the next 12 months.

It’s shaping up to be a stormer, as a whole host of producers step up their game and we start to feel the fall-out from the Allied Domecq sell off and the race is on among a whole raft of producers both in Europe and America, to secure strong market positions.

Two inter-related subjects that will come increasingly in to play next year are China and the environment. They’re related because the current astronomical growth in China’s economy is the single biggest threat to the environment and it’s set to change the industrial landscape sooner rather than later.

British newspaper The Independent recently reported that at the current rate of growth, China’s demand for oil will not be greater than the rest of the world put together within 35 years, but it will seriously outstrip the world’s daily oil output. It will double the number of cars on the world’s roads.

And to feed its increasingly consumer hungry population it is eating the world’s forests at a rate never seen before.

Of course the huge growth figures aren’t expected to last because it is unlikely that wealth in China will be spread uniformly. But already the effects of the new economy are affecting the way we live our lives. World oil price rises are the most obvious symptom.

But in the coming months and years we will all be made to weigh up the effects of the new world power. The distillers have other issues to address, too. What does a strong Chinese economy mean for them?

Already China is starting to import whisky, but how great will the demand be? Will Chinese tastes be similar to those of Japan or of Russia? Will a new super-rich strat of Chinese society demand the very finest whisky and suck it away from the West?

Will it eventually follow Japan and emulate Scotch with its own whisky industry?

What we can expect is that while the sun’s shining and the demand’s there, distillers will make hay. And as current issues concern a shortage of quality spirit, rather than a surfeit of it, increased demand from a buoyant China may well impact negatively on prices for the rest of us.

The environment issue is linked to the growth of the Chinese economy for the obvious reason that China and America’s tally-ho approach to fuel consumption and the effects of global warming are already directly affecting the world we live in.

For whisky production, environmental changes could arguably be responsible for the fact that Scotland’s western isles have experienced water shortages already, and a warmer climate has meant that some distilleries have extended their silent times due to cool water shortages.

Undoubtedly other effects of climate change will influence water supplies and the like, and at some point whisky production will be directly affected.

And although many distilleries make a sizeable contribution to green economics, I expect we’ll see more distilleries stepping up their efforts to recycle and reuse their energy output. It all makes for challenging times as we enter 2006. We’ll be returning to these topics during the year no doubt.

One thing’s for certain though: whisky isn’t going to get duller in to the New Year.

By Dominic Roskrow

Section : From the Editor

Page number : 5