Could The Gin Industry Benefit From EU Tariffs On American Whiskey?: Analysis

By Steve Wynne-Jones
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Could The Gin Industry Benefit From EU Tariffs On American Whiskey?: Analysis

With the EU proposing potential tariffs on American whiskeys and bourbons in retaliation to US President Donald Trump’s planned steel and aluminium tariffs, major players in the drinks sector will be watching developments closely.

Last week, Paul Varga, the chief executive of Brown-Forman, the maker of Jack Daniels, said that while the business has had to deal with a number of trade “spats” in the past, the current situation is unprecedented.

Trump’s policy move, and the EU’s retaliatory pledges may mean that Brown-Forman "could be an unfortunate and unintended victim of a policy which in part is aimed at promoting something which Brown-Forman is a stellar example of - a committed, long-term American manufacturing company."

Varga added that the company was "monitoring and observing" the current situation closely.

Waiting In The Wings

One sector in particular that will be looking to capitalise on any shortfalls in the whiskey category is the gin market, which has enjoyed something of a renaissance in recent years.


According to figures from the WSTA, British gin exports broke the £500 million barrier last year, with gin exports from the UK having doubled in value over the past ten years.

The UK exports more gin around the world than it does beef, and the WSTA believes that the sector could be fundamental in maintaining the country’s export strength in a post-Brexit landscape.

“We are, by some margin, the largest exporter of gin in the world, with huge potential for growth, and our industry needs to take further advantage of this,” said WSTA chief executive Miles Beale, adding that the UK government should look to reduce or remove taxes on the sector.

“On leaving the EU, we want more government support to increase exports to developed markets such as Australia, Japan, China and the US. The removal of tariffs would allow Britain to maintain its position as the world's largest spirits exporter and further boost the UK economy and provide more jobs.”


EU Exports

Of particular note for the sector is the fact that UK gin exports to the EU rose by 16% last year, to a value of more than £250 million.

This means that the European Union is almost as valuable than all other regional markets combined, which account for £278 million worth of exports.

It remains to be seen what sort of trading landscape between the UK and EU will emerge as the Brexit process continues, however with sales of American whiskies likely to be impacted in the coming months, should the EU press forward with its tariff plans, UK gin producers will be hopeful that they will be able to capitalise.

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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