As the global trade landscape continues to shift, US craft distillers are facing significant challenges, particularly with the looming threat of tariffs on American whiskey exports to Europe. If no agreement is reached, these tariffs could resume as early as March 2025, creating uncertainty for an industry already grappling with rising input costs due to inflation [b4a551b3].
Chris Swonger, CEO of the Distilled Spirits Council of the United States (DISCUS), highlighted that consumers are becoming increasingly price-conscious, which is affecting sales across the board. Jeff Quint, owner of Cedar Ridge Distillery, noted that for the first time in over a decade, he is projecting flat sales, a concerning trend for the industry [b4a551b3].
Sonat Birnecker Hart of Koval Distillery reported a noticeable dip in business and expressed worries about the potential for both tariffs and increases in liquor taxes. This comes after a period of growth where spirits supplier sales surged at twice the pre-pandemic rate in 2020 and 2021, with tequila sales rising over 5%. However, American whiskey and other categories are now seeing declines [b4a551b3].
The situation is further complicated by the EU's previous suspension of tariffs on American whiskey in 2022, which had led to a remarkable 60% surge in exports. A potential 50% tariff, as projected, could be devastating for the craft distilling sector, which has worked hard to establish a foothold in international markets [b4a551b3].
Despite these challenges, there is a silver lining. The growth in spirits-based ready-to-drink products has been noted as a bright spot in the market, indicating that innovation within the industry may help mitigate some of the adverse effects of the looming tariffs [b4a551b3].