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Dried out: trade war cuts US whiskey sales to EU

February 19, 2020

 

 

Europeans have developed a taste for American whiskey over the past decade but trade disputes have slashed US exports of the booze, an American trade group said Wednesday (12 February).

 

Washington and Brussels are in the midst of a multifaceted trade feud that included punitive US tariffs on steel and aluminium imports and the EU retaliating in June 2018 by slapping a 25% tax on some US goods, notably bourbon.

 

That took a chunk out of US whiskey exports to Europe last year, which fell by 27 percent, the Distilled Spirits Council of the United States (DISCUS) said.

 

US spirit exports worldwide fell by 14% in 2019, according to the council.

Renewed interest in Kentucky bourbon and Tennessee whiskey — which unlike Scotch whisky is made from corn — drove a 55% increase in spirits over the past 10 years.

 

“These great American Whiskey products that have been the toast of the global cocktail scene are struggling under the weight of the EU tariffs,” DISCUS President Chris Swonger said in a statement.

 

Amid another trade dispute over European subsidies to Airbus, the US in October imposed 25% tariffs on single-malt whisky from Scotland, and wine from France and Spain.

 

US officials say they are considering raising their tariffs to as much as 100%, and could widen the penalty list to add popular items such as cognac. DISCUS expects a decision on that by the end of this week.

 

The trade group is hopeful the truce in the trade war with China and a revised trade agreement with Canada and Mexico “will create new momentum for negotiations with the EU that will result in the immediate removal of retaliatory tariffs,” said Christine LoCascio head of public policy for DISCUS.

 

Sales of spirits remained healthy in the US in 2019, increasing by 5.3% to reach $29 billion.

 

Bourbons and whiskeys from the southern US drove the growth along with increased sales of rye, single malt scotch, tequila, mezcal and pre-mixed cocktails.

The sector continued to gain market share against wine and beer and now accounts for 37.8% of the total alcohol market in the United States.

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