Whiskey wave rises as new laws emerge in India, Middle East

The whisky industry is seeing an increase in global demand, partly due to recent regulatory changes in international markets. Notably, the Middle East and India have emerged as key players, changing the dynamics of whisky production and distribution.

India’s Dominance in Whiskey Consumption

India’s rise as a whisky consumer has been particularly striking. In 2022, India overtook France to become the world’s largest whisky consumer by volume. Anthony ZhangCEO and Co-Founder Wineunderscored this shift during a recent Benzinga webinar on whiskey investing. He noted that “India has overtaken France as the world’s largest consumer of whiskey, and a lot of it is actually produced locally in India.”

This growth in consumption isn’t being driven solely by domestic production. There’s also a growing appetite for American bourbon, which is being blended into local recipes and brands. Zhang noted, “They want a lot of what you might call bourbon from America to be shipped to India, blended into different recipes, and then also blended into local brands.”

Regulatory Changes in the Middle East

The Middle East has also become a major export market for whisky, thanks to changing regulations. These changes have opened up new opportunities for whisky producers looking to expand their reach. The region’s growing middle class and evolving social norms are driving demand for luxury spirits.

Zhang explained the broader impact of these changes: “The export market, especially from the Middle East and India, is growing. This growth is opening up new opportunities for whisky producers and investors.”

Impact on whiskey producers

These regulatory changes are having a tangible impact on whisky producers around the world. Independent bottlers like The Single Cask are particularly well-positioned to benefit from these market expansions. Vincent Flint Hill With Single barrel discussed how these changes are impacting their business: “We can now bring our single cask whiskies to markets that were previously inaccessible due to bottle size regulations and other restrictions.”

Recent changes in bottle size regulations in the United States have also contributed to this. Flint-Hill recalled: “A few years ago, the 750ml regulations changed in the US, which is still the largest market in the world. This means that independent bottlers can now enter the US market with the same products that they are introducing in Europe and Asia.”

Future prospects for investors

For investors, these regulatory changes present a promising landscape. Growing demand in India and the Middle East is driving the need for more mature whiskey, which in turn creates opportunities for those investing in whiskey barrels. Zhang shared some comments on returns: “For the five-year holding in the U.S. whiskey market, average annual returns have been in the mid-to-high teens, around 15% to 17%.”

As the global whisky market continues to expand, producers and investors alike are poised to take advantage of changes in regulations that will help the industry continue to grow and develop.

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