Scotch, whiskey and vodka prices set to rise as US Trump tariffs bite
European drinks makers face rising costs after the US President Donald Trump confirmed tariffs on wine and spirits will remain in place. Analysts warn American consumers could see bar prices rise sharply as the trade dispute drags on.
European drinks companies have suffered a setback following details of the US-EU trade deal being released.
The EU trade commissioner, Maros Sefcovic, said yesterday (21 August) in Brussels that EU-made wine and spirits would not be exempted from President Trump’s 15% impost “yet.”
He said the commission will continue to push for more products to be exempted and for wines and spirits to be included in that list as part of further negotiations.
Share prices dip for major European drinks groups
Shares in Pernod Ricard and Remy Cointreau traded 2.2% and 1.7% lower, respectively, while Davide Campari-Milano fell 1.8% and Diageo was down 0.9%.
As the bad news was released, Reuters revealed new research showing the forecast impact of Trump’s tariffs on US drinkers.
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The tariffs are likely to hit US$10 billion worth of wine and spirits imports each year and could raise wholesale prices by more than 80 cents per gallon on average, with a smaller 3-cent increase for beer, the analysis, commissioned by trade association the Wine & Spirits Wholesalers of America, showed.
The levies could rake in $987.1 million in revenues for Washington, once lost sales are taken into account, it said, with the costs likely to be passed on to US businesses and consumers, causing sales and job losses.
Price of Scotch and whiskey set to climb
Despite the UK trade deal meaning that tariffs would be only 10% a shot of Scotch at the bar could cost American drinkers as much as an extra $1 on average per drink.
The analysis suggested that for a 75cl bottle of Scotch, an average $1.92 tariff would mean a price rise of more than $12 per bottle at the bar once wholesale and retail margins had been added. That would translate into an extra $1 per drink.
Because their import prices are lower, the effect of the tariffs on Irish whiskey and Polish vodka would lead to an average price increase of 26 and 52 cents, respectively, per drink.
Trade body warns of lasting consumer impact
Cutter Smith, who takes up the post of WSWA chairman next month, said that in some cases, wholesale prices were already on the rise.
“It is a company-by-company and, in some cases, brand-by-brand decision, but one thing is certain: if these tariffs stay in place, they will make their way to the consumer,” he said.
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EU wines and spirits are lucky: only 15% tariffs.
Swiss wines and spirits have been hit with 39% tariffs. this would be enough to drive the average drinker to consume more Swiss absinthe … if only he or she could afford it!