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Scottish Independence Would Make Scotch 'Hard To Price', Experts Warn

Scotch Lovers Will Find This Independence News Hard To Swallow
Asa Bennett
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Scottish First Minister Alex Salmond takes a look round the new 3m tour of the Scotch Whisky Experience in Edinburgh, after officially opening the attraction.
David Cheskin/PA Archive

Scottish independence risks hampering exports of Scotch whisky by making it "difficult to price" due to the resulting instability and uncertainty over what currency would exist in Scotland, experts have warned.

This comes as Bank of England governor Mark Carney dismissed the idea of Scotland keeping the pound sterling in a formal currency union arrangement as "incompatible".

Citi analyst Andrea Pistacchi said today in a research note: "An unstable Scottish currency would make it difficult to price Scotch."

Scotch whisky is important given that it makes up an estimated 85% of Scotland's food and drink exports. Pistacchi suggested that Scottish independence could have "potentially significant implications" for Diageo and Pernod, the two major whisky producers.

If there was no risk of instability due to questions over Scotland's currency, Pistacchi admitted that "in theory" independence could help Scotch exports as they would be boosted by any resulting slide in Scotland's currency, which "may be a positive" as it could make them cheaper to buy.

David Nicholls, alliance manager at UKForex, told the Huffington Post UK: "Uncertainty over the currency issue may make it harder to sell goods, until importers know what they are dealing with."

He added: "In the case of independence, a weaker Scottish currency, assuming it is weaker, would provide a cost benefit to UK importers of the drink. But the added currency risks and hedging costs to UK importers may impact purchase budgets, and affect pricing accordingly.

A spokeswoman for the Scottish Whisky Association said: "We see potential risks to these from an independent Scotland and we look for reassurance that any future arrangements would be at least as supportive as the current ones. Nevertheless, whatever the result on 18 September, we are committed to working with government to deliver economic success."

See also:

DIY Giant B&Q Could Charge Scots More If They Back Independence

Scottish Independence: Cameron, Miliband And Clegg Abandon PMQs To Campaign For No Vote

Mark Carney Warns Currency Union 'Incompatible' With Scottish Independence

This comes as analysis by Credit Suisse suggests that the break-up of the United Kingdom would cause Scotland to fall 'into a deep recession".

According to the bank's analysts, people are "highly likely" to rush to withdraw their savings from an independent Scotland in a "deposit flight".

They added: "The re-domiciling of the financial sector and UK public service jobs, as well as a legal dispute over North Sea oil would further accelerate any downturn."

Scottish Independence: Who Stands Where
No: Barack Obama(01 of12)
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The American electorate may have gone off their president after five and a half years in office but Barack Obama still enjoys 2008 levels of popularity in the UK. People from the No Campaign probably fainted when Obama said "the key word is 'united'" when asked about Scotland. (credit:ASSOCIATED PRESS)
Yes: Sir Sean Connery(02 of12)
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Austin Powers may be against independence but James Bond isn't. Sir Sean has told his fellow Scots that independence "is too good an opportunity to miss". He also said the potential boosts to the film and creative industries are "particularly exciting". (credit:Danny Lawson/PA Archive)
No: Hillary Clinton (03 of12)
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"I would hate to have you lose Scotland," the potential next American president told Jeremy Paxman on Newsnight. "I hope that it doesn't happen but I don't have a vote in Scotland. But I would hope it doesn't happen." She added: "I would think it would be a loss for both sides but, again, I don't have a vote." (credit:ASSOCIATED PRESS)
Yes: Brian Cox (Not That One)(04 of12)
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The face of BBC science has not declared for or against Scottish independence but his namesake, actor Brian Cox is firmly in favour of it.He has provided the voice of Duggy Dog, an animated Highland Terrier created by the Yes campaign who aims to "sniff out fact from fiction" in the independence debate. (credit:ASSOCIATED PRESS)
No: David Bowie(05 of12)
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Since dabbling in right-wing politics in the 1970s, Bowie's views appear to have mulled somewhat.When Kate Moss collected his BRIT award earlier this year, she read a statement on behalf that asked Scotland to "stay with us".The statement said: "In Japanese myth the rabbits from my old costume that Kate's wearing live on the moon. Kate comes from Venus and I from Mars, so that's nice. I'm completely delighted to have a Brit for being the best male, but I am, aren't I Kate? I think it's a great way to end the day. Thank you very, very much and Scotland - stay with us." (credit:Martin Rickett/PA Wire)
Yes: Alan Cumming(06 of12)
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This Scot is firmly pro-independence. So much so, the New York-based actor bought a flat in Edinburgh last year so he would be able to vote in September's referendum. Unfortunately, it was deemed not to be his "main address" and, by extension, he will not be able to vote. (credit:Andy Kropa /Invision/AP)
No: JK Rowling(07 of12)
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JK Rowling, who wrote her first Harry Potter book while living in Edinburgh and still lives in the Scottish capital, has given £1 million to defeat Alex Salmond.She wrote she was "no fan of the Westminster government".She added: "The simple truth is that Scotland is subject to the same 21st century pressures as the rest of the world. The more I listen to the Yes campaign, the more I worry about its minimisation and even denial of risks."A Twitter account digested this and reflected: "What a #bitch after we gave her shelter in our city when she was a single mum." (credit:Ian West/PA Wire)
Yes: Billy Bragg(08 of12)
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Always outspoken, Bragg's take on Scottish independence is that it would be as good for his native England as it would for north of the border. The left-winger said: "Scottish independence throws up the possibility of a more progressive England. We won’t be British any more, we’ll be English." (credit:Jonathan Short/Invision/AP)
No: The BBC, According To Protestors(09 of12)
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On Sunday, 2,000 people gathered outside BBC Scotland's Glasgow headquarters to protest what they saw as its pro-union stance.A couple who attended the protest said: "The BBC is paid for by all of us whether Yes or No but it doesn’t reflect both sides of the campaign. They don't cover stories that damage No, but are always headlining stories against Yes." (credit:Jonathan Brady/PA Wire)
No...ish: Pope Francis(10 of12)
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Pope Francis voiced concerns about Scottish independence - but his comments were non-commital to the point where both the yes and no camps welcomed them.Speaking about secession movements across the world, the infallable representative of God on earth said countries breaking away from larger states should be considered on a "case-by-case basis".He acknowledged the case was "clear" in in some cases but listed Scotland as one of the cases where "I ask myself it is so clear".He said: "Let's think of the former Yugoslavia. Obviously, there are nations with cultures so different that couldn't even be stuck together with glue."The Yugoslavian case is very clear, but I ask myself if it is so clear in other cases - Scotland, Padania, Catalunya."No campaigners said the Pope was "right to warn about the impact of division" while No campaigners said: "As His Holiness says, these matters should be looked at on a case-by-case basis." (credit:ASSOCIATED PRESS)
Yes: Glasgow's Sunday Herald(11 of12)
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The Sunday Herald became the first Scottish paper to back the yes campaign in May with this front cover. It wrote: "We understand the past, as best we can, and guess at the future. But history is as nothing to the lives of the children being born now, this morning, in the cities, towns and villages of this country."On their behalf, we assert a claim to a better, more decent, more just future in which a country's governments will be ruled always by the decisions of its citizens.'' (credit:Sunday Herald)
Yes. No. Wait, What?: Elijah Wood(12 of12)
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Sir Sean appeared to win an ally when Lord of The Rings actor Elijah Wood said Scotland should "fucking go for it" with independence.But he later backtracked, claiming he had misunderstood the question he was asked at the Edinburgh Film Festival. Speaking to the Scotsman, he said: "You know, in truth, I thought they were talking about independent cinema. I mean, it’s a film festival.” (credit:ASSOCIATED PRESS)
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