Whisky chiefs to press US on ‘devastating’ Scotch tariffs
Whisky industry representatives are heading to the US for crunch trade talks amid fears the Trump administration could further hike tariffs on single malts.
The US imposed a 25 per cent duty on Scotch whisky and liqueurs last October as part of a long-running dispute at the World Trade Organisation (WTO) over aircraft subsidies.
A review of tariffs is now being carried out by the Office of the US Trade Representative, which could result in rates on single malts increasing.
Karen Betts, chief executive of the Scotch Whisky Association (SWA), will travel to Washington DC next week to meet key stakeholders to discuss the import tariffs.
She said the move would have a detrimental effect on the US economy as well as industry in Scotland.
She explained “There’s real concern about a rise in tariffs on Scotch whisky - a further rise could be devastating to distillers.
“We will speak to the US government and urge them to lift the tariffs altogether – all the tariffs are doing is damaging the sector on both sides.
“Tariffs on whisky products also has an impact on the American economy. Price rises impact sales, which impacts on investment and jobs, and also has an effect on taxes.” The Scotch whisky representatives will hold the talks in collaboration with the Distilled Spirits Council of the United States (DISCUS).
Meetings have been arranged with senior representatives from the US departments of trade, commerce and agriculture, aiming to increase the pressure on the Trump administration for the removal of whisky from the trade dispute.
Prime Minister Boris Johnson has already vowed to remove tariffs on US whiskey once the UK leaves the EU.
Single malt exports across the pond are worth more than £1bn every year and the country is the industry’s most valuable market.
The SWA has raised fears the added costs will undermine “decades of hard work and investment” and ultimately lead to a reduction in the amount spirits crossing the Atlantic, putting jobs and investment at risk.
It estimates that in the first year of the tariffs come into force, exports of whisky to the US will fall by as much as 20 per cent, the equivalent of sales worth nearly £80m.
In the meantime, the association is calling on the UK government to support the sector and mitigate the impact.
Some distillers have already taken proactive steps to try and lessen the impact of the tariffs, as well as the effects on trade posed by the UK’s departure from the European Union.
Douglas Taylor, chief executive of Bruichladdich Distillery Company, which produces a range of single malts, including the award-winning Islay Barley, notes in the firm’s most recent annual accounts that it has moved to try and anticipate such “risks.”
He points out that the Hebridean firm has secured written agreements with its suppliers regarding the supply of all its main raw materials, and that it also has a specific department dedicated to supply management.
Rates on Scotch account for 62 per cent of the total UK tariff bill, according to the SWA.
Scotch exports to the US were worth £1.04bn in 2018, with 137 million bottles shipped across the Atlantic.