Page last updated at 00:38 GMT, Thursday, 3 April 2008 01:38 UK

'Wake-up call' over export sales

Whisky bottles
The drinks industry was a casualty in the final quarter of 2007

Business leaders have voiced concern about a decline in Scottish export sales in the final quarter of 2007.

But despite a drop of 2% in real terms over these three months, there was an overall rise of 3% in 2007.

The Scottish Chambers of Commerce said the figures should act as a "wake-up call" for both the governments at Holyrood and Westminster.

Finance Secretary John Swinney said the global economic downturn may lie behind the drop.

He added: "No country can isolate itself from the prevailing global economic conditions but what we can do is act to make Scotland more competitive - which is exactly what this government is doing."

Mr Swinney criticised the chancellor's decision to impose what he called "punitive" tax rises on spirits which would affect the whisky industry.

The drinks sector saw a fall of 8.1% over the three months to the end of the year.

The dip in fortunes in the final quarter highlights the fragility of the recovery in Scotland's export performance
Iain McMillan, CBI Scotland

There were also falls in electrical and instrument engineering (2.2%) and mechanical engineering (8.7%), contributing to an overall fall of 3.6% in engineering exports.

Over the year, though, engineering and drink were the main industries contributing to the annual growth in manufactured export sales, with annual growth of 3.5% and 4.5% respectively.

CBI Scotland said it hoped the end-of-year figures would prove to be a "temporary blip".

Its director, Iain McMillan said: "The dip in fortunes in the final quarter highlights the fragility of the recovery in Scotland's export performance that has been witnessed over the last couple of years."

He welcomed the cut in business rates.

Importance recognised

The chief executive of the Scottish Chambers of Commerce, Liz Cameron, expressed concern at the figures from the final quarter of 2007 and called for "much more" to be done.

She called decisions to raise capital gains tax rates and the small companies rate of corporation tax "bizarre".

A Scotland Office spokesman said that Westminster would continue to support Scotch whisky, pointing out that 90% was sold abroad.

He added: "Not only will an increase in internal UK duty have no effect on these sales but the government has recognised the importance of protecting this export success and is already working to legislate to protect those overseas markets."

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