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Tariffs will slash US whisky exports by 20%, SWA warns

Published:  18 October, 2019

The 25% tariff on the import of Scottish single-malt whisky to the US, which came into force last night, will lose the industry 20% of its US exports in the first year, the Scotch Whisky Association has estimated.

Whisky exports to the US were worth £1.17bn last year.

The tariff on whisky has been imposed along with a range of other punitive measures as part of the 15-year dispute between the US and the EU over state subsidies to airplane manufacturers Boeing and Airbus.

Responding to the introduction of the tariff, SWA chief executive Karen Betts said: “This is very bad news for our industry.  It means that Scotch whisky is now paying for over 60% of the UK’s tariff bill for the subsidies it provided to Airbus, eight times more than the next most valuable UK product on the tariff list.

“That single malts are being targeted is particularly damaging for smaller producers, who stand to be the hardest hit.

“Scotch whisky has been imported tariff-free to the United States for the last 25 years. This move undermines decades of hard work and investment which has seen Scotch whisky sales boom in the US. It will impact both our industry and its supply chain.

“Ultimately, jobs could be at risk.”

Last week, Scottish MPs tabled an urgent question to the UK government about its response to the tariffs, warning that 3,000 jobs in the industry could be at risk.

Some 11,000 people are directly employed by the whisky industry in Scotland at present.

The SWA has called for government action to protect the industry and mitigate potential damage. Possible measures targeted include a reduction in the duty charged on whisky.

Duty on spirits currently runs at £28.74 per litre of pure alcohol, which takes the total tax burden on an averagely-priced bottle of whisky to 74%, the SWA claims.

“We now need the UK and Scottish governments to work together to ensure distillers can weather the storm. We want them to consider a range of support to the industry, including reducing the UK tax burden on Scotch whisky in the Autumn Budget. This will provide an important lifeline while efforts continue to remove the tariffs,” Betts said.

The government has defended its efforts. "The UK government has raised the issue at the highest levels with both the EU and the US, including with President Trump and will continue to do so until these tariffs are dropped,” Scotland office minister Colin Clark told Sky News.