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Whisky Advocate: U.S. Importers Likely To Stockpile Single Malts Ahead Of New Tariffs

October 11, 2019

The Trump administration’s announcement on Oct. 2 that it will impose tariffs on billions of dollars in European imports starting this month could bode ill for single malt Scotch and Irish whiskies in the U.S., Whisky Advocate reports.

Scotch Whisky Association (SWA) chief executive Karen Betts anticipates that the move will “undoubtedly damage” the Scotch whisky sector. “Despite the fact that this dispute is about aircraft subsidies, our sector has been hit hard, with single malt Scotch whisky representing over half of the total value of U.K. products on the U.S. government tariff list, amounting to over $460 million,” she said in a statement. The U.S. is Scotch whisky’s “largest and most valuable market,” Betts added, with more than £1 billion ($1.2b) of Scotch exported stateside last year. The measure could also disproportionately hurt smaller producers, and lead to a “cumulative impact on consumer choice,” she said.

Distilled Spirits Council vice president of international trade Robert Maron says the tariffs could affect both availability and shelf price. “You may see some companies making the decision to pass the price along to their consumers,” Maron told Whisky Advocate. The impact may not be immediate, however. “Some of the companies, being very savvy internationally, having dealt with this with their American whiskey exports to the E.U., may have been stockpiling products,” Maron says.

“It’s not going to be on October 19 that you’ll see an increase on Scotch and Irish whiskies in the United States,” Maron continued. With 16 days’ notice on the imposition of the tariffs, U.S. importers of affected whiskies will likely ship in as much stock as possible as a temporary buffer; one small importer told Whisky Advocate that they are air-freighting enough additional pallets of single malt Scotch to last through the holiday selling season and into 2020.

Still, if the tariffs remain in place for an extended period, the effect will eventually be felt in the form of hiked prices, reduced choice, or both. “What we’re trying to do is urge the U.S. and the E.U. to get back to the negotiating table to resolve these disputes,” Maron says. Whisky Advocate has the full story.—Zak Kostro

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