“Vital” US market in sight for indies after whisky tariff lifted

11 March 2021, 08:16 AM
  • The US has temporarily suspended tariffs on Scotch whisky that have cost the industry more than half a billion pounds and made it “very difficult” for independents to gain a foothold in the US market
“Vital” US market in sight for indies after whisky tariff lifted

Scottish whisky makers are raising a dram to trade negotiators after the US government agreed to suspend tariffs on UK exports, including Scotch whisky, the UK food and drink industry’s largest export.

The 25% tariff has been in place since 2019 as part of a 16-year-long dispute between US and EU aerospace rivals Boeing and Airbus. The Scotch Whisky Association estimates that the tariff has cost companies over half a billion pounds, with exports of whisky to the US falling by 35% over the 16 months that it was in place. In January, after the UK left the EU, the government suspended Boeing tariffs against the US as a show of good faith.

“Today, everyone in our industry – from small companies to large – is breathing a sigh of relief, said Karen Betts, chief executive of the SWA.

Sam Laing, head of content at Cask88, an independent whisky cask and bespoke bottle specialist, welcomed the news of the tariff’s suspension. “The American market is so important to us, and it’s a real two way street,” Sam told Speciality Food. “Not only do we want to send Scotch over the Atlantic and get some fine Bourbons in return – we also rely so much on the US to get our barrels for maturation. The longer this trade feud went on, the harder it would have been to come back from, for both sides.”

Sam said the tariff came at a particularly bad time for scotch, as consumers had started drinking less but spending more on premium products, such as Single Malts. “This consumer desire for more artisanal products has been a real boon for newer Scottish distilleries as well as independent bottlers like us, who are devoting themselves towards producing their own distinctive Malt Whiskies.”

However, he added, “The recent trade tariffs have made it very difficult for these smaller producers to gain a foothold in the US market, quite frustratingly considering the growing demand we have seen in other international markets. The removal of tariffs will allow these producers to gain a foothold in the vital American market, and join some of their more established colleagues.”

International trade secretary Liz Truss said, “The benefits will be felt across our nation, especially in Scotland, where Scotch whisky distillers will be able to sell at lower prices in the United States, their most valuable market. The easier it is for Americans to buy a bottle of Macallan, Talisker or Glenfiddich, the more money those producers will have to invest in their businesses, their staff and futures.”

The UK will continue to seek a fair settlement to the dispute that permanently removes punitive tariffs. For now, the threat of a tariff on whisky is not yet out of sight. “The UK government and the new US administration will now need to work hard on finding a negotiated settlement to this long-running aerospace dispute,” the SWA’s Karen said. 

While the industry isn’t out of the woods yet, the impact on small producers could be significant if the tariff suspension becomes permanent. By opening up the US market for whisky makers, it means spreading the word about great small-batch producers just got that bit easier.

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December 2021