It’s been a tumultuous year for American whiskey as producers feel the full impact of punitive tariffs. Which brands will weather the storm in 2020?

Similar to its beleaguered British cousin, American whiskey was dealt a severe blow after the EU imposed retaliatory tariffs on a list of US goods in response to Donald Trump’s taxes on metal imports – a separate set of measures to those involved in the aircraft subsidies spat that hit Scotch whisky.

The tariffs were imposed in 2018, but the full effects have been keenly felt throughout 2019. According to Chris Swonger, president and CEO of the Distilled Spirits Council of the US (Discus), “the negative impacts of the retaliatory tariffs on US spirits are accelerating and severely threatening what has been a great American trade success story”.

China, the EU, Mexico and Canada implemented the tariffs. While Mexico and Canada have resolved their dispute with the US, the charges remain in place in China and the EU. The Far East may not be an established region for Bourbon, but brands have suffered from the financial burden of remaining in key markets such as the UK, Germany and France.

For some smaller producers, the tariffs represent an insurmountable barrier to entry to new markets. The established players are weathering the storm, but the negative effects are significant: tariffs shaved US$125m off the 2019 earnings of Jack Daniel’s maker Brown‐Forman.

“In a way, the American whiskey tariffs are a tariff on Brown‐Forman because we have a 60% share of American whiskey in Europe,” CEO Lawson Whiting told SB this year. “We are by far the most affected company – no‐one else is even close.” Since the EU’s imposition of a 25% tariff on American whiskey last summer, exports to the bloc have declined 19%, according to Discus, and distillers are concerned that shipments will continue to fall as long as the measures remain in place. All eyes will be eager to read the next set of export figures from Discus for the 2019 calendar year.

Regardless, investment continues to be poured into the industry as international distillers look to capitalise on growing demand. One notable example is Pernod Ricard, which in 2019 alone has acquired the maker of Jefferson’s Bourbon, as well as Rabbit Hole Distillery and the Firestone & Robertson Distilling Co.

Commenting on the increasing presence of global players in American whiskey, Jared Himstedt, master distiller at Texas‐based Balcones, says: “No one wants to miss out on the next big breakout brand, nor miss out as smaller producers continue to pick up more market share. Hopefully it brings expertise, economies of scale and distribution networks to smaller distilleries rather than having a homogenising or dumbing down effect on creative producers.”

Click through the following pages to see which brands we believe are ones to watch in the year ahead.

Jefferson’s

This Louisville brand entered the Pernod Ricard fold a few months ago after the French drinks firm acquired its parent company, Castle Brands.

The brand is one of the most established Bourbons in Pernod’s budding American whiskey portfolio and looks set to increase global distribution in the coming 12 months.

Jim Beam

The world’s biggest Bourbon brand is bearing the brunt of EU retaliatory tariffs, but that hasn’t stifled the ambition of its new CEO, Albert Baladi, who is aiming to “make Bourbon the world’s whisk(e)y”.

Significant investment has been pumped into Jim Beam, which is aiming to replicate its recent success in Japan in key markets around the world. “Building scale around Bourbon is one of our big priorities,” says Baladi.

Lux Row Distillers

The opening of Bardstown’s newest distillery, at a cost of US$35m, was a significant milestone for owner Luxco. The US drinks firm will look to take production completely in house after years of sourcing third‐party liquid for its Rebel Yell, Ezra Brooks, Blood Oath and David Nicholson brands.

Lux Row is already planning to increase maturation capacity, and has a pipeline of innovation planned under the direction of head distiller John Rempe.