Distilled Spirits Council - 2018 Tariff Impact on U.S. Distilled Spirits

Despite significant distilled spirit sales export increases in the first half of 2018 the second half saw major nosedive after tariffs were implemented. The first half of the year saw an increase of 26.1% to a total of $881 billion while the second half, normally the better half of the year, dropped 3% vs. 2017 to $909 billion. Looking at the entire year, there was a year over year increase of 9.5% from $1.64 billion in 2017.  The full impact was felt in Q4 when exports fell 13.1% vs. 2017.

American Whiskey Saw a Steeper Decline

In the Distilled Spirits Council’s 2019 Annual Economic Briefing, the report showing the negative impact of the retaliatory tariffs on American Whiskeys is accelerating, particularly to the European Union (EU), according to full year 2018 export data.

The retaliatory tariffs beginning in June 2018 caused American Whiskey exports to decline by 8.2% between July and November as compared to the same period in 2017.  The available data was only through November, and the Council declined to project full year results due to the uncertainty in the marketplace resulting from the retaliatory tariffs.

“With the full year data in hand it is clear that the retaliatory tariffs are having a significant and growing impact on American Whiskey exports, which had been a bright spot for U.S. agriculture exports,” said Council President and CEO Chris Swonger. “The damage to American Whiskey exports is now accelerating, and this is collateral damage from ongoing global trade disputes.”

Full Year Data Underscores Accelerated Tariff Damage

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Globally, for the first six months of the year American Whiskey exports grew 28 percent to a total of $595 million.  Following the imposition of the retaliatory tariffs, exports during the second half of the year declined 11 percent compared to 2017, for a total of $593 million. Typically, U.S. distilled spirits exports in the second half of the year are much higher than in the first half, underscoring the harm the tariffs have caused.

Overall, total American Whiskey exports still managed to eke out a small gain of 5.1% in 2018, to a record $1.18 billion—a significant deceleration from the annual growth rate of 16 percent recorded in 2017.

“These numbers are worrisome—even if some portion of the front-end growth is attributable to larger producers positioning product in foreign markets ahead of the tariffs,” Swonger said.

The Council, in collaboration with the U.S. Department of Agriculture, has conducted an export promotion program for U.S distilled spirits exports since 2006, hosting promotional events in 18 countries, primarily to educate spirits trade, distributors, mixologists and local journalists about American Whiskeys.

“With our member companies, we have worked for many years to promote American Whiskeys in key export markets. As a result, their popularity has been skyrocketing.  We urge policy makers and our trading partners to rapidly address these retaliatory tariffs before more damage is done to what has been a great American trade success story,” Swonger concluded.

The Distilled Spirits Council of the United States – DISCUS is the leading voice and advocate for distilled spirits in the United States. In 1973, three organizations—the Bourbon Institute, the Distilled Spirits Institute and the Licensed Beverage Industries, Inc.—merged to form the Distilled Spirits Council of the United States. DISCUS a 501(c)(6) non-profit represents the leading producers and marketers of distilled spirits and advocates on legislative, regulatory and public affairs issues impacting the distilled spirits sector at the local, state, federal and international levels.

Click any image below to enlarge to see the impact in the United Kingdom, European Union and Canada.

Resource: Distilled Spirits Council

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