A new study suggests a Scottish vote in favor of independence could boomerang on one of the nation’s proudest exports: Scotch whisky.
Analysts from Bank of America Merrill Lynch say that Scotland’s upcoming vote for independence on September 18th risks severing the nation from the British pound, forcing it to create its own currency and casting it into a brave new world of fluctuating exchange rates. Whisky makers, in particular, could absorb the brunt of the shocks. They account for the nation’s second largest export and ship to roughly 200 countries around the world, according to the report.
“At present, the large producers typically invoice Scotch whisky in U.S. dollars,” the authors wrote. “As such the main transactional FX risk faced is the movement in Sterling/US$ which is typically hedged on a 12 month basis. A volatile currency would likely be more difficult and expensive to hedge making pricing and planning decisions harder. “
That would mean a possible contraction of investment, fewer barrels of Scotch and a slightly less satisfied global population of Scotch drinkers.