Bruce Schleiner
Louisville, Ky. (AP) — Domestic sales of American whiskey, like watered drinks, were dissatisfied in 2024. But threats to drain sales in major foreign markets are the impending tariffs that loom on one of the toughest challenges, industry groups said Tuesday.
The brewing trade risks that the conflict between Canada and Mexico will raise the price of the US spirit in those markets. The biggest risk is the European Union, with tariffs expected to resume on April 1 at twice the rate of American whisky producers. With 25% EU tariffs suspended several years ago, the new tariffs would cancel a strong rebound in American whiskey sales in Europe, the Distillation Spirits Council said.
“These re-challenges at a rate of 50% of tariffs will hinder this growth and cause irreparable harm to distillers, big and small,” said Council CEO Chris Swanger. spoke about the EU. “It would be a devastating blow to forcing many stills from our biggest export market.”
The talk of tariffs overshadowed the 2024 US Spirits Sales report. This has revealed a decline in domestic sales in the American whiskey categories, including bourbon, Tennessee whiskey and rye whiskey. The council did not cut off sales for each type of whiskey.
When President Donald Trump pushes to reset world trade, the US spirit could become a famous target for retaliation. During the trade dispute during Trump’s first term, American whiskey exports to the EU increased by 20%, the council said. He said these exports skyrocketed 60% when tariffs were suspended.
Another major export market in the American spirit, Canada initially ordered tariffs on US imports, including beverages, until a grace period was announced last week. Before the suspension, authorities in several states said they were planning to remove American liquor brands from government store shelves.
Trump not only sees import taxes as a tool to force concessions on issues such as immigration, but also sees import taxes as a source of income to close the government’s fiscal deficit. .
But anxiety is now high among whiskey producers and their supporters, in states that many of them voted overwhelmingly to bring Trump back to the White House. This includes Kentucky, which has 95% of the world’s bourbon supply, and which had a record 14.3 million barrels of bourbon aging in early 2024.
The updated tariff threat is set to establish footholds in the EU to increase domestic sales in 12-15 states in the US, as border oak distilleries arrive in central Kentucky.
“We’re working very hard to create a presence,” distillery owner Brent Goodin said this week by phone. “Craft products, especially craft bourbon, are highly regarded around the world.”
His family-owned craft distillery shipped around 200 cases of bourbon and lavender whiskey to Lithuania last fall, he said. He was preparing to send another cargo soon, and in hopes of breaking down what would be distributed to Poland and considered a potentially large market in Hungary, he said.
If his product hits 50% tax, it could all crash.
“It’s going to wipe out the market,” Goodin said. “It would kill it quite a bit.”
Spirit exports come from 45 states, and American whiskey accounts for 63% of US Spirit exports, the council said. The spirits industry hopes that cooler heads will generate trade transactions that will prevent the product from tangled again at the front and rear tariffs.
Comes when a Spirits producer encounters a headwind at his home in the US
Overall, the spirits industry maintained its advantage in U.S. market share, but its revenues slipped in 2024, the council said. The US spirits supplier said sales fell 1.1% to $37.2 billion, but the volume rose 1.1% to a 9-liter case of 331.2 million.
The revenue and volume of the ultra-premium spirit that earns the best prices fell last year as buyers withstand inflation opted for slightly cheaper options. The combination of high inflation and interest rates has forced many to “reduce spending on small luxuries like distillation spirit,” Swonger said.
According to Swonger, industry-wide results reflect a return to a more normal domestic level after sales during the Covid-19 pandemic. Another challenge is that younger adults seem to be absorbing it.
Domestic sales of American whiskey fell 1.8% in 2024 with revenues of $5.2 billion, the council said.
Vodka sales remained flat, totaling $7.2 billion, but tequila and mezcal said sales rose 2.9% last year to total $6.7 billion. Sales of Premixed Cocktails, which includes spirit products that are easy to drink, increased by 16.5% to $3.3 billion.
Original issue: February 11, 2025, 12:15pm EST
