The Wine and Spirit Trade Association has submitted a response to the Government’s consultation on damaging US tariffs, calling for the swift removal of tariffs on US whiskies and warning that adding duties to wine could be detrimental to UK jobs across the industry.
Since June 2018, Bourbon and US whiskies have been subject to an additional tariff of 25%, ending 25 years of tariff-free trade in whiskies between the UK and the US.
The WSTA is calling for a return to the historic ‘zero for zero’ agreement between the US and EU that began in the mid-90s.
The decision to impose a tariff on US whiskies, initially taken by the EU, has had seismic impact on our wine and spirit industry, and resulted in huge declines in trade with our most significant trade partner.
Whilst the annual value of US whiskey imports to the UK has halved since 2017, UK importers, the hospitality sector and in turn, UK bourbon fans have paid an extra £55m in retaliatory tariff, since duties came into effect.
The WSTA has also warned the Government about the perils of expanding the punishing tariff regime and targeting wine as part of their trade strategy. In total, US wines make up approximately one in ten bottles of wine on the UK market, but the ratio of US bulk imports to overall wine imports is far higher at 22%.
Significant wine bottling plants exist in Bristol, Cheshire, Durham, Fermanagh, Manchester and Norfolk supporting hundreds of direct UK bottling jobs. A new tariff on US wines would lead to job losses, a significant fall in Exchequer revenue and, ultimately, hurt UK wine consumers.
Continuation of tariffs either on US whiskies or new ones on US wines could see the US return to targeting UK exports in future trade disputes. After a recent agreement to suspend the Boeing-Airbus dispute – which saw huge damage inflicted on UK exports of Scotch and Northern Irish whiskies, as well as liqueurs and wine – the next logical step is to remove US alcoholic beverages from the scope of all current and future disputes and return to trade on a ‘zero for zero’ basis.
Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said: “This Government is a strong proponent of free trade around the world. The next step to take is to remove US wines and spirits from all current and future trade disputes. US whiskies have paid more than their fair share of tariff, and in a year when the hospitality industry has seen significant closures, it’s time we got back to trade and not tariffs with our close friends across the pond.
“The WSTA supports the removal of tariffs on all wines and spirits with immediate effect.”