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Luxco ships early ahead of tariff uncertainty
Kentucky-based Luxco has fast-tracked shipping of its Bourbon to Europe ahead of the American whiskey tariff suspension’s expiry date in March.
Shipments of the company’s Bourbons – Yellowstone Select, Rebel 100 and Ezra Brooks 99 – will now arrive in the UK and Europe by the end of March, rather than the original expected date of quarters two and three.
The move comes as the suspension of American trade tariffs for the EU is set to expire on 31 March 2025.
A retaliatory 25% tariff on imports of American distilled spirits into the EU was originally enacted by President Trump in 2018, as part of a disagreement between his administration and the EU over steel and aluminium.
In June 2021, the hike was set to double to 50%, before it was suspended until 1 December 2021 to give the two sides time to come to an agreement.
In January 2022, then US president Joe Biden placed a two-year suspension on the tariffs, which was further extended in December 2023 until 31 March 2025.
Trump’s return to the White House has brought further uncertainty for the sector.
Luxco said it is bringing forward exports of its Bourbon and American whiskey to protect UK and European consumers against price rises caused by the tariffs, should they come into effect.
Greg Mefford, managing director of international business at Luxco, explained: “The inventory we had scheduled for shipping in quarters two and three this year will now arrive in Europe before the end of March. We’re going early to minimise how any future changes in trade tariffs impact the pockets of American whiskey fans across Europe and the UK.
“There’s uncertainty about what the US government will or won’t do with trade tariffs and a looming 31 March deadline. After this date, American whiskey entering Europe will be exposed to a 50% tariff. We’re working on cost and pricing strategies to mitigate this, and early shipping is one option we’re pursuing.”
‘Counterproductive’ tariffs
Luxco-owned Limestone Branch Distillery, which makes American single malt Yellowstone, recently confirmed that it’s upping its exports to the UK and Europe by 22%, following December’s ruling of the category’s official recognition.
According to the Distilled Spirits Council of the United States (Discus), the EU is the largest export market for US spirits, accounting for approximately 40% of exports in 2023, equal to US$883 million.
The organisation has warned of the ‘devastating’ ramifications the industry will face should the tariffs be reintroduced.
Tariff talk has been rife in the industry since Trump’s return. The US president’s 25% duty threat on imported Mexican and Canadian products has seen Ontario’s liquor board threaten to axe US alcohol from its stores because of the tariffs.
The proposal has been predicted to cost US$5 billion in lost tax revenue.
Mefford added: “Retaliatory trade tariffs seem counterproductive for local and international markets, whether that’s the country exporting or importing. We welcome international trading agreements that are pro-trade and pro-consumer, which avoid pricing people and businesses out of markets, and support growth opportunities throughout supply chains.”
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