U.S. bourbon an endangered species in European bars

Small U.S. bourbon producers are finding that European drinkers love their products. It’s those tariffs that don’t go down so smoothly.

After the European Union’s June implementation of a 25-per-cent tariff on bourbon, the popular U.S. whiskey variety, the impact has been clear. One American producer said his exports have “dropped to zero” as a result. Last year, they made up 15 per cent of revenue.

“Every U.K. buyer backed off,” said Paul Hletko, the owner of Evanston, Ill.-based Few Spirits. “They may want to buy it, but if they can’t sell it at the right price, that’s not doing us any favours.”

Small distillers cite the drought as proof their fears of a global trade war are coming to fruition. Europe had been blossoming as a source of new revenue — but this market has been effectively cut off for producers that lack the clout or brand recognition of titans like BrownForman and Diageo.

The tariffs, which target U.S. goods such as Levi Strauss & Co. blue jeans and Harley Davidson Inc. motorcycles, are the EU’s retaliation to U.S. duties on foreign steel and aluminum.

Hletko said the low six figures he’s made this year from international orders all were booked before the tariffs’ imposition.

Rob Cassell, the owner of Philadelphia-based New Liberty Distillery, said European buyers have dissolved due to the price hikes.

Spiros Malandrakis, head of alcoholic drinks research at Euromonitor, said that the tariffs have stunted the growth of bourbon in Western Europe. Consumers will likely go to new whiskies from countries such as Canada, or drink something else; big players like Brown-Forman’s Jack Daniels will find ways to absorb the extra costs.