Yesterday the UK agreed to end a four-year-old tariff on American whiskies. Once lifted, on June 1st, the move will effectively make US bourbon and rye 25% cheaper on British liquor shelves. According to data compiled by the Distilled Spirits Council, whisky exports to the UK slipped by some 42% throughout the taxation period with annual sales dropping from $150 million in 2018 to $88 million last year. The impact was disproportionately felt by craft producers who rely heavily on emerging markets to grow business. As of now, the UK is the fourth-largest consumer of American whiskey. The news is being met with jubilation on both sides of the Atlantic.
"The UK represents the most important whiskey market in Europe,” according to Scott Harris, founder and general manager of Catoctin Creek Distillery, in Purcellville, Virginia. “So we are delighted that we will once again be able to compete on an equal basis in places like London and Manchester."
For fans of the bourbon in those far-off cities, the tariff repeal is long overdue. Especially considering that the US already reached separate agreements with the EU and UK almost a year ago, suspending tariffs on all other major categories of spirit, including rum, scotch, Irish whiskey and cognac. Yesterday’s announcement brings American whiskey in line with the rest.
It also marks and end to a period in which the spirits trade was positioned as collateral damage in unrelated economic entanglements across the pond. Disagreements between the US and Europe on issues including steel and aluminum as well as the on-going WTO Boeing-Airbus dispute, are the underlying cause for the booze tariffs—which were merely retaliatory in nature.
The effort brought together all elements of US beverage alcohol, from producers and importers to wholesalers, retailers and the on-premise. In fact, no less than 50 domestic trade associations banded together to form a lobbying coalition called Toasts Not Tariffs.
The Toasts Not Tariffs Coalition consists of 50 U.S. trade associations representing the entire three-tier chain of the U.S. beverage alcohol sector (i.e., at the producer, importer, wholesaler, retailer and on-premise levels) united in opposition to U.S., EU and UK tariffs on beverage alcohol products. Today the organization was singing the praises of the Biden administration—specifically Secretary of Commerce Gina Raimondo as well as the Office of the U.S. Trade Representative.
“We deeply appreciate the administration’s steadfast focus on rebuilding relationships with our close trading partners and allies in the EU and UK,” said a spokesperson for Toasts Not Tariffs. “These significant agreements will benefit U.S. workers throughout the entire alcohol supply chain, including farmers, distillers and vintners as well as those who distribute and sell the products at restaurants, bars and spirits and wine stores.”
Craft whiskey makers, for their part, are already anticipating the impact this will have on their ability to grow. “We plan to reinvest those savings to drive business growth abroad and help offset rising costs of raw materials,” says Brian Treacy, co-founder and head distiller at Sagamore Spirit in Baltimore, Maryland. “It’s a huge help to small distilleries like ours.”
Michael Langan of Yellow Rose Distilling in Houston, Texas adds: “So far this year we’ve seen a huge increase in our export business since tariff removal started talking hold [in the EU]. We have seen a 100% increase in our export business versus our forecast so far this year and have already shipped more whiskey to Europe in the first quarter of the year than in all of 2021. With the removal of the UK tariffs we expect this number will continue to increase.”
For legislators in both the United Kingdom as well as the US, this was an easy way to win over fans. Indeed, there appear to be plenty of appreciative parties in both their respective constituencies. “This tremendous breakthrough was the result of hard work and cooperation by many—on both sides of the Atlantic,” says Amir Peay, owner and operator of James E. Pepper Distillery in Lexington, Kentucky. “Today we raise a glass in their collective honor.”
