LONDON (Reuters) – European Union tariffs affecting U.S. spirits like bourbon whiskey will be “devastating” for the liquor industry, trade associations on both sides of the Atlantic said on Wednesday.
The European Commission said earlier on Wednesday it would impose tariffs on 26 billion euros ($28.31 billion) worth of U.S. goods from next month, ramping up a global trade war in response to U.S. tariffs on steel and aluminium.
The move will revive suspended tariffs on bourbon whiskey, and double the rate to 50%, said Ulrich Adam, director general of trade body spiritsEurope, which represents top U.S. and European spirits producers like Diageo and Jack Daniel’s maker Brown-Forman. It could also see new tariffs imposed on a host of other products, with tequila and gin on the list of potential targets.
This would have “devastating consequences” for spirits companies on both sides of the Atlantic, spiritsEurope said in a statement, pointing out EU companies that produce spirits in the United States could be hit.
The intensifying global trade war comes as the spirits industry grapples with a sharp downturn in sales following a post-COVID boom, and steep levies imposed by China on European brandy, hitting cognac especially.
“The market is very weak,” spiritsEurope’s Adam said, pointing to high inflation, weak economies and stretched household income. “It’s another big blow”.
Any attempts by producers to increase prices to offset tariffs would likely lead to market share losses as the industry is very competitive and price sensitive, he continued.
U.S. spirits companies are heavily invested in Europe, putting jobs at risk, spiritsEurope’s statement added.
The Distilled Spirits Council of the United States said the “debilitating tariffs” from American whiskey’s largest export market will further curtail growth and hit distillers and farmers across the United States.
American whiskey exports to the EU surged 60% in the last three years to $699 million in 2024, DISCUS continued, adding the previous tariffs on bourbon imposed in 2018 caused a 20% decline.
Lawson Whiting, CEO of Jack Daniel’s maker Brown-Forman, told the UBS Consumer and Retail Conference in New York that it had been trying to prepare for the tariffs.
“We have done some things to try to get us prepared, but it’s a tough spot,” he said, adding he was hopeful the two sides could resolve the dispute before the tariffs come into force.
($1 = 0.9184 euros)
(Reporting by Emma Rumney, Editing by Louise Heavens and Elaine Hardcastle)
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