After several difficult years for distillers, there’s good news for the spirits economy.
Liquor exports from the United States increased this year, hinting at a rebound after retaliatory tariffs from the EU lifted, according to a new report from the Distilled Spirits Council of the United States (DISCUS).
The EU and U.K. reached an agreement late last year to remove the 25 percent tax on all whiskey and bourbon exports late last year.
Tariffs on rum, brandy, and vodka were suspended in November 2021, while the EU and U.K. halted the retaliatory taxes on whiskey in January and July 2022, respectively.
Total spirit exports in the United States from January-July 2022 increased by 21 percent, compared to the same length of time last year. Exports of whiskey alone increased by 22 percent during the first seven months of the year.
Exports during this period are valued at $1 billion, according to data from the report. Some 32 percent of all American spirit exports headed to the EU, equalling about $331.8 million in value.
“While U.S. spirits exports tumbled between 2018 and 2021 due largely to retaliatory tariffs on American spirits imposed by the EU and U.K., this latest data is an encouraging sign that consumers in these key export markets are beginning to return to purchasing American spirits,” DISCUS vice president of international trade Rob Maron states in an emailed press release. “We applaud the Biden administration for securing important agreements to suspend retaliatory tariffs on American spirits and are working to return to permanent duty-free trade in spirits.”
Trade disputes in 2018, unrelated to the alcohol industry, led to the imposition of tariffs. As a result, exports of American whiskey to the EU dropped by a stark 37 percent, according to an October 2021 statement from DISCUS.
The recent growth can also be attributed to a rising general interest in high-quality spirits and the subsequent expansion of the premium beverage industry, according to the report. In 2005, there were fewer than 100 craft distilleries in the United States — a number that has since jumped to 2,300 today. On-premise retail sales also assisted in the recovery, as bars and restaurants moved to fully reopen after Covid-19 closures.
While exports haven’t yet reached pre-pandemic numbers, this data looks optimistic for domestic spirit producers.