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US faces ‘challenging’ time as presidential election looms

With the US presidential election forthcoming, Distilled Spirits Council of the US (Discus) and other spirits bodies share the issues they stand to face. From concerns about the possible return of Trump-era tariffs to much-needed support for the hospitality workforce, we temperature check the state of the American spirits industry ahead of voting on 5 November.

American whiskey
Ahead of the US presidential election, the industry is focusing on tariffs, market access, and other issues

At its annual conference this past March, Discus introduced Cher A Spirit, its candidate for the Cocktail Party, a new initiative launched to band its members together regardless of political affiliation. The US spirits industry is facing a number of issues entering the upcoming presidential election between Kamala Harris and Donald Trump, and the notion from Discus and Spirits United is that the industry needs to band together to combat forces like inflation, taxes, tariffs, and the threat of a labour strike.

With the election less than a month away, Discus president Chris Swonger shares that sentiment once more. “It’s imperative that the industry comes together, works together, and rises up in support,” Swonger says. “For us, we are bipartisan, and we’re committed to working with the Harris administration or the Trump administration, and we’ll be strong advocates for this industry whoever wins the White House.”

Discus is based in Washington DC, and Swonger says the organisation has been monitoring polls both on a national and state level, and doing its best to get a sense of what might happen. For Swonger and Discus, the chief issue of this election remains the hefty tariffs imposed on American whiskey by the EU stemming from the Trump administration’s trade disputes over steel and aluminium. A 25% tariff was suspended in December 2023, but will be reimposed and doubled if a resolution isn’t reached by March 2025.

“We will be turning on a dime, depending on the results of the election, to quickly work with our European counterparts and the incoming administration to make sure those tariffs that are scheduled to go up on American whiskey either get suspended again, or our hope and aspiration is to get them eliminated all together,” Swonger says.

Former president Trump has frequently mentioned tariffs on the campaign trail as a means to solve the national deficit, and Swonger says he would anticipate a very aggressive trade posture should he win the presidency once more.

“We’re going to do everything we can to demonstrate and showcase that distilled spirits products, both here in the United States and overseas are not commodity products,” Swonger adds. “A tariff on American whiskey by our EU partners impacts American jobs and our ability to export, and the same will apply if the US happens to impose a tariff on Cognac. The industry is totally aligned, both in the US and in Europe, in terms of working with the EU and whichever administration comes into power to try to avoid that.”

Beyond the potential EU tariffs, Swonger says Discus is focused on the forthcoming US dietary guidelines, state market modernisation efforts that include access to spirits-based RTDs, and combatting state level spirits taxes like the proposed 287% hike in Nebraska that was shot down in August thanks in part to an effort organised by Discus.

“This is a challenging, unique time for the industry,” Swonger says. “We want to make sure that American craft distillers around the country can continue to thrive just like we want our larger companies to thrive too because distilled spirits play such a positive role in society, and support economic vitality in communities around the country.”

Craft spirits

Elsewhere within the US spirits industry, the American Craft Spirits Association (ACSA) is focused on keeping businesses open, leveraging opportunities for increased market access, and continued tax relief and other incentives.

“Discussions with members of both parties indicate they value the economic impact that our small businesses create in rural, urban, and suburban communities throughout the US,” ACSA CEO Margie AS Lehrman says. “We are cautiously optimistic that we will be able to create the changes we need to move craft spirits from the decreases in value and volume that we have seen in 2023 results back to positive territory over the next year.”

Lehrman says her members are struggling with the impact of price increases and the effects of inflation on their customers. Earlier this year, the ACSA traded statements with the Wine and Spirits Wholesalers of America (WSWA) over market access, namely direct-to-consumer (DTC) shipping laws. New York recently joined the shortlist of states that allow DTC shipping.

“That is a big deal and ACSA hopes other states will see the benefit and follow suit,” Lehrman notes.

Expiration of Trump-era tax cuts

The WSWA is focused on the potential expiration of Trump-era tax cuts, particularly the 199A tax deduction, which allowed family-owned and small businesses to reinvest in their operations. The provision allows pass-through entities whose income is taxed at the individual tax rate, rather than the lower corporate rate, to deduct certain business expenses.

“If it expires, wholesalers will be at a significant disadvantage compared to corporations, and we are advocating for its extension to ensure continued growth for small and medium-sized businesses,” WSWA president and CEO Francis Creighton says.

Similar to Discus, the WSWA is concerned about the return of tariffs on wine and spirits, and it is closely watching each candidate’s trade policies. “A return to Trump-era tariffs could severely impact supply chains, while a Harris administration would likely maintain the status quo,” Creighton added. “Nonetheless, we must stay vigilant as global trade dynamics remain unpredictable.”

What’s more, the WSWA is following cannabis regulation closely, as well as supply chain disruptions, such as the ongoing threat of port strikes. The WSWA is actively engaging with lawmakers on both sides of the aisle and emphasising the negative impact tariffs would have on wine and spirits.

“SipSource data indicates ongoing declines in the wine and spirits sectors, with no immediate signs of recovery,” Creighton says. “These challenges, combined with potential policy shifts, highlight the need for a proactive and strategic approach in the coming months.”

Bartenders and over-regulation of alcohol

On the bartending front, Bo Shuff, executive director of the United States Bartender’s Guild (USBG) says they are facing the same issues as many Americans, namely fair wages, affordable healthcare and housing, and safe working conditions. More specific to bars, Shuff lists over-regulation of alcohol distribution and the difficulties of opening a new nightlife business as key issues.

“While many of these issues are decided at the state, local, or even neighbourhood level, it’s encouraging that both presidential candidates are speaking directly to the needs of the hospitality workforce” Shuff notes.

“The ethics of tip-based compensation, the role of immigration in the hospitality workforce, and the effect of tariffs on the cost of operating bars and restaurants are all complicated and nuanced issues that deeply affect bars and bartenders. But while we are affected by these policies, the bartending community isn’t regularly heard in the conversation. That’s one of the goals of the new USBG Advocacy Committee.”

On a state level, the USBG is keeping a close eye on two ballot propositions impacting service industry minimum wage. Arizona Ballot Proposition 138 would change how the state’s service industry minimum wage and tip credits are calculated, while Massachusetts Proposition 5 would phase out the tipped minimum wage entirely.

The general feeling across the American spirits and hospitality sectors is a nervous mix, and nerves will understandably remain until the election polls close on 5 November.

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