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The country of origin effect is the economic consequence of associations made between a good
and its value based on the geographic region from which it was exported. In culture, these
associations can persist across markets and transcend multiple generations. Over time, the
relationship strengthens between people and the brand that manufactures a particular good.
As a result, biases form. These biases are what drive unfounded preferences for a particular
brand; even when comparable (many times less expensive) alternatives exist.
The $5 billion Scotch Whisky industry exports 1.23 billion bottles each year (2017) and more
Scotch is enjoyed around the world than Irish, American and Canadian whiskies combined. This
speaks to the 180 markets where the spirit is sold. The Scotch Whisky Regulations 2009 include
explicit provisions for the manufacture, marketing, movement from Scotland to another
country, sales descriptions, distillery name and locality and region geographical indications; all
of which impact branding and labeling of the spirit. The first provision, manufacture, includes
the requirement that all whisky made in Scotland must be Scotch and any Scotch sold under
any brand name must have been made at that respective distillery. The Regulations include
more explicit requirements for the distilling process; including raw material inputs and
additives, which are only water and a specific type of coloring (if they must use it). The words
“Scotch Whisky” and “Scotch” are words protected by UK law and all distilleries that produce
the spirit are referenced in the Regulations. Even the geographic region of Scotland where the
