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US spirits exports rise by 14% in 2021

Exports of US spirits returned to growth in 2021, driven by American whiskey, however the UK’s 25% tariff continued to curb the category’s growth.

American whiskeys continued to boost US spirits exports in 2021

According to the Distilled Spirits Council of the US (Discus), the nation’s spirits exports increased by 14% to US$1.6 billion last year. However, it remains below 2018 levels of US$1.8bn when the sector had no tariffs imposed.

In 2018, former US president Donald Trump imposed a 25% tariff on steel and 10% on aluminium from the EU.

The EU implemented a 25% tariff on American whiskey and other goods in retaliation, amounting to €2.8bn (US$3.3bn) worth of products.

On 31 October last year, the US and EU agreed to suspend steel and aluminium tariffs from the start of 2022, but the tariff remains in the UK.

“US spirits exports are beginning to bounce back and that’s definitely a positive sign, but the value of 2021 exports remains far below levels achieved before the 2018 retaliatory tariffs kicked in,” said Rob Maron, Discus vice-president of international trade.

“We applaud the Biden administration for securing a suspension of the EU’s retaliatory tariffs on American spirits, including American whiskeys. With approximately 37% of total US spirits exports going to the EU, these retaliatory tariffs have severely impacted American spirits exports.”

Earlier this year, trade representatives from the UK and US revealed they had begun discussions to resolve the steel and aluminium dispute, but so far no agreement has been reached.

“The UK’s continued imposition of a 25% retaliatory tariff on American whiskeys will only continue to curtail growth,” Maron added.

The UK tariff has resulted in a 42% decline in American whiskey exports between 2018 and 2021, Discus said.

2021 export data

Discus said the rebound last year was due to the reopening of the on-trade, consumers trading up to premium bottlings and the lifting of retaliatory tariffs on certain spirits.

The US, EU and UK agreed to a five-year suspension of tariffs on products such as US rum, brandy and vodka, as well as Cognac and single malt Scotch.

Between 2001 and 2021, global US spirits exports expanded by 220%, from US$493 million to US$1.6bn, led predominantly by American whiskey, Discus found.

American whiskeys continued to boost spirits exports in 2021, with the category accounting for 61% of all spirits exports in value, and 38% in volume last year.

The top five markets for American whiskeys in 2021 were: the European Union (US$440m), Japan (US$95m), the UK (US$88m), Australia (US$84m) and Canada (US$68m).

US exports of gin climbed by 59% to reach US$40.1m, while vodka grew by 10% to US$78.2m. Liqueurs and cordials increased by 41% to hit US$103.8m.

Discus said the top 10 American spirits exporting states were: Tennessee, Kentucky, Florida, Texas, Indiana, Illinois, New York, California, Arkansas and New Jersey.

American spirits exports to free-trade-agreement countries and tariff-free nations reached US$1.36bn in 2021, accounting for 86% of total US spirits exports.

Spirits continued to gain market share of the total beverage alcohol sector in the States, increasing by 1.7% to 41.3% last year.

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