Tariffs take toll on whiskey exports in last half of 2018

LOUISVILLE, KY. — Retaliatory tariffs caused a sharp downturn in American whiskey exports in the last half of 2018 as distillers started feeling the pain from global trade disputes, an industry trade group said Tuesday.

Exports to some key overseas markets gyrated wildly last year for producers of bourbon, Tennessee whiskey and rye whiskey.

Overall, U.S. spirits exports in 2018 stayed on another record-setting trajectory, due in part to surging whiskey sales in the months leading up to the tariffs as larger distillers stockpiled supplies, the Distilled Spirits Council said. Other categories including vodka, brandy and rum also had strong overseas sales.

But exports would have been much higher without the trade war, it said.

“For the first time, data can demonstrate the negative impact of retaliatory tariffs on what had been a booming export growth story,” said Christine LoCascio, the council’s senior vice president for international affairs.

“The tariffs are making it more

difficult to be competitive in key markets,” she added.

The export figures confirmed fears among industry leaders that tariffs would depress overseas sales.

American whiskey exports to the European Union — the industry’s biggest export market — fell by 8.7 percent from July through November of last year, compared to the same period in 2017, the group said in its annual report released in New York.

In the first half of 2018, American whiskey exports to the EU surged by 33 percent, it said.

Overall global American whiskey exports grew by 28 percent in the first half of 2018, then fell by 8.2 percent from July to November — compared to a year ago — once tariffs took effect, according to the trade group’s export figures, based on numbers supplied by the U.S. government.

“That suggests that the tariffs are starting to have a measurable impact on American whiskey exports,” LoCascio said.

Despite the volatility, exports for all U.S. spirits recorded another record at almost $1.7 billion through November, the council said.

American whiskey makers face retaliatory tariffs in Canada, Mexico, China and Turkey as well as the EU. Those duties amount to a tax.

Retaliatory tariffs caused a sharp downturn in whiskey exports in the last half of 2018. American whiskey makers face retaliatory tariffs in Canada, Mexico, China and Turkey as well as the EU.