Representatives of the UK and US whisky industries have called for the end of punitive tariffs that are wiping millions off export values every month.
The Chief Executives of the Scotch Whisky Association (SWA) and the Distilled Spirits Council of the United States (DISCUS) have called on the UK and US governments to urgently find a negotiated solution to unrelated trade disputes and to remove all tariffs on distilled spirits.
A 25% tariff was imposed on imports of US whiskey into the EU in June 2018, in response to US tariffs on European steel and aluminium. In October 2019, the US imposed a 25% tariff on imports of Single Malt Scotch Whisky to the US in the long-running dispute over EU and US subsidies to Airbus and Boeing.
Scotch and American whiskies have traded tariff-free across the Atlantic for over 25 years, and they have flourished as a result. However, both Scotch Whisky and American whiskies are now caught in transatlantic trade disputes that have nothing to do with them but which are now harming investment, productivity, jobs and growth.
Speaking at a Scotch Whisky reception at Dover House hosted by the Secretary of State for Scotland, Karen Betts, Chief Executive of the SWA, said: “Our message is clear. The UK and US governments must return quickly to tariff-free trade.
“The current disputes about steel and aluminium and aircraft manufacture have nothing to do with us, but the tariffs stemming from them are causing needless damage to our industry on both sides of the Atlantic, and to the livelihoods we support. Constructive negotiations must solve trade disputes, tariffs on whiskies will not.
“Exports each way are markedly down, and if these falls are maintained over the year around £100 million is likely to be lost in Scotch Whisky exports.
“Many smaller Scotch Whisky companies are now asking themselves how they can continue exporting to the US, whether they can build up alternative markets, and if not how their businesses will cope.
“Until a resolution is found, it is critically important that the UK and Scottish governments act to mitigate the impact of tariffs on Scotch Whisky producers, particularly SMEs which are being disproportionately hit. A cut to excise duty in the March Budget would help businesses strengthen their presence in the UK while exports to the US are under such pressure.”
Chris Swonger, President and CEO of the Distilled Spirits Council of the United States, said: “Our industries have enjoyed great growth, thanks to the zero-for-zero tariff agreement. Scotch Whisky exports to the US have grown 270%, and American whiskey exports to the UK have grown 410% since zero-tariff trade was introduced 25 years ago.
“That ended in June 2018 when the EU imposed a 25% tariff on American Whiskey in response to U.S. actions on steel and aluminium, which was further compounded by the US introducing a tariff on Single Malt Scotch Whisky, liqueurs and other EU distilled spirits products in connection to an unrelated trade dispute in October 2019.
“We need to get back to zero-tariff trade which benefitted distillers on both sides of the Atlantic so our industries can go back to doing what we do best – distilling amazing whiskeys and sharing them with the world.”
About Scotch Whiskey Association
The Scotch Whisky Association (SWA) is the trade body for the Scotch Whisky industry. With more than a century’s experience of looking after the interests of this iconic industry, the SWA is recognised as one of the leading trade associations in the UK and are a respected voice in markets around the world. The organisation represents over 70 member companies, from global spirits producers to family-owned firms, established distillers to start-ups, that accounts for 95% of Scotch Whisky production. SWA members own hundreds of brands and thousands of expressions enjoyed in more than 180 markets worldwide.
The Distilled Spirits Council is the leading national trade association representing producers, marketers and importers of over 60% of all distilled spirits sold in the U.S. and approximately 75% of total U.S. spirits exports. DISCUS advocates on legislative, regulatory and public affairs issues impacting the distilled spirits sector at the local, state, federal and international levels.
- The value of Scotch Whisky exports to the US grew from £280m in 1994 to over £1bn last year (Source: HMRC)
- By value, 33% of Scotch Whisky exports to the US in 2018 were Single Malts (a value of £344 million, or $463 million).
- The US market accounted for 22% of global value, and 10.7% of global volumes of Scotch Whisky exports in 2018. (Source: HMRC, SWA analysis)
- 137 million bottles of Scotch Whisky were exported to the US in 2018: that's more than 4 bottles per second (Source: HMRC, SWA analysis)
The Scotch Whisky industry directly employs about 11,000 people in Scotland, and many more indirectly through its supply chain. Over 7,000 of these jobs are in rural areas of Scotland.