Scotch whisky industry warns of post-Brexit tariffs

LONDON, Aug 3 (Reuters) - The Scotch whisky industry on Wednesday warned of higher tariffs facing one of Britain's biggest exports to a number of countries, and called on the UK government to push for favorable trade conditions after leaving the European Union.

The Scotch Whisky Association, which speaks for an industry that exports more than 90 percent of its production, called for a UK trade policy that is "as open and free-trading as possible". It urged clarity on the nature of the arrangement sought with the EU, as well as transitional agreements to protect trade while new deals are struck with other countries.

Unless there are transitional arrangements, Scotch whisky will lose significant tariff reductions in markets including Korea, South Africa, Colombia and Peru, when it ceases to be covered by the EU's Free Trade Agreements, the trade group said.

"We are calling on the UK government to bring clarity to the transition to Brexit as soon as possible and to negotiate to ensure that the current open trading environment is not affected," said David Frost, chief executive of the Scotch Whisky Association.

"We plan to play an active role in influencing this whole process to ensure that Scotch remains a product enjoyed across the globe."

The industry said it will face no tariffs on exports to the EU, which accounted for nearly a third of its 3.8 billion pounds worth of exports last year, or in other large markets including the United States, Canada and Mexico.

In markets with high tariffs, like India with its 150 percent tariff on imported spirits, the group said Brexit would not change anything.

That is why Ivan Menezes, chief executive of leading Scotch producer Diageo (LSE: DGE.L - news) , sought to play down the fallout of Brexit last week after releasing full-year results.

"Regardless of outcomes around where Brexit ends up, it is not a big deal in terms of the business performance for us," said Menezes, whose company owns Johnnie Walker, J&B and Lagavulin among others. "The key thing for us is to ensure that Scotch whisky has the most favorable conditions to trade around the world and that we don't get negative trade arrangements or regulation or change coming."

It remains unclear what kind of relationship with the EU Britain wants, and that is a "major uncertainty", the Scotch Whisky Association said, since many rules around food and drinks are made at a European level, including those that govern food labeling and bottle sizes.

($1 = 0.7500 pounds) (Reporting by Martinne Geller in London; Editing by Alexandra Hudson)